Tariffs and other trade barriers have fallen in recent decades as an increasing number of nations have become part of global trade agreements. Meanwhile, technological advances have made it possible for businesses to access new markets and communicate with customers around the world. In this global marketplace, an understanding of global economic analysis is a powerful tool for business success.
Identification
Global economic analysis studies the interaction of the economies of the world, including the worldwide exchange of goods and services.
Function
Global economic analysis focuses on macroeconomic indicators of economic performance, such as Gross National Product, or GNP, which measures the value of a nation's output of goods and services, including gains (or losses) from world trade.
Features
Other important indicators in global economic analysis include inflation, foreign exchange rates, growth of GDP, income levels, unemployment, and global trade.
Benefits
Global economic analysis helps government and business leaders understand the impact of world economic activity on their own companies or national economies.
Considerations
Key challenges in global economic analysis include the environmental effects of world economic activity. Environmental damage is a major cost of globalization and requires a global effort to minimize its impact.
Geography
Increasingly, global economic analysis has paid attention to the growing economic clout of emerging nations, such as China and India, as well as the economies of Latin America.
