World Leaders Meet as Global Economy Faces Multiple Threats

 Ryan Stefancin:

World Leaders Meet as Global Economy Faces Multiple Threats

    One of the strongest vocal points in economic news today is the everyday change in inflation rates. Currently we have and inflation rate of 8.2%, which is important to recognize as concerning. However, there are other issues that concern the growth of the global, and U.S. economy. As we know there has been a large increase in price of oil/gas over the last year or so partially due to the conflict between Russia and Ukraine which limited the supply of oil. Hence an increase in prices of oil. It is important to understand that prices in any economy are larger dependent on the price of oil. If the price of oil is up, so are the prices of many other goods in the economy. In other words, the increase of the price of oil is one of many factors in the large rate of inflation in today's economy. President Biden attempts to combat this high price of oil through a broker agreement which would help markets escape debt. This would not only combat inflation and prices of oil but would also decrease the price of grains, rice and other staple food items that poorer countries tend to rely on. The federal reserve is also doing their part in terms of raising interest rates in order to lower the rate of inflation. 

    The current conflict between Russia and Ukraine are directly responsible for the economy downfall in not just the U.S. but in other parts of the world. Recently world leaders had met at the world Summit meeting where the worlds 20 leaders gather in effort to resolve conflicts such as this one. During the summit President Volodymyr Zelensky of Ukraine had reported that Ukraine would not pull its troops out and tame their resistance until their territory was fully restored. Vladimir Putin, President of Russia was not in attendance of this meeting. The opinions of the Chinese Foreign Ministry and China's leader, Xi Jinping state that "all countries should replace division with unity". Although not directly quoting the conflict between Russia and Ukraine, it is the understanding that he was referring to that directly. This resolve in conflict is seemingly important to China due to the strong partnership they have with Russia. It is noticeable in the most recent International Monetary Fund (I.M.F) data that suggests that China has grown at a rate of 3.2% in 2022 but is expected to only grow at a rate of 2.7% in 2023. Along with the decrease in china's numbers, it is apparent that Britain is currently in a recession based on new GDP reports. 

    It is very clear in this article that although there are a few major problems in many economies, that they all stem from the much larger issue of inflation. In this case, inflation is the fuse and the closer it gets to the bottom the more problems that arise with it. President Biden and the federal reserve are doing all they can in hopes to combat this and hopefully this diminishes the other issues in the economy concurrently. 

https://www.nytimes.com/2022/11/15/business/economy/world-leaders-meet-as-global-economy-faces-multiple-threats.html 

Economic Growth and Rising Emissions Don't Necessarily Go Hand in Hand

 Since the Industrial Revolution, economic growth has been accompanied by a rise in greenhouse gas emissions. Coal, oil, and natural gas all contributed to improving the economy and raising living standards, however, they also caused a significant rise in emissions. It has long been thought by experts that in order to reduce emissions, a "degrowth" in the economy was necessary. This, however, theory has been debunked among richer and highly industrialized countries. In the past decade, 33 countries have been reported to have successfully increase their GDP while simultaneously lowering their emissions. There are two main shifts that are believed to have caused this trend.

The first shift is the changing structures of economies. At the beginning of the Industrial Revolution and for centuries after, many countries' economies were manufacturing based. This means they relied heavily on the use of fossil fuels to fuel their growth which contributing to rising emissions. Many large, rich economies, like the US, have now switched to being service-based economies. Serviced base economies do not require the level of fossil fuels as manufacturing ones and this shift has contributed to a reduction in their emissions. 

The second shift is that, in general, imports are getting greener. China's export sector has been able to decarbonise itself at a faster rate than other economies. This then reduces the total carbon footprint of other economies like the US who import heavily from China.

The link between economic growth and rising emissions may have been broken for richer companies, it has not for poorer countries. Global emissions are still on the rise and further efforts still need to be made to minimize it.

From the article:

https://www.economist.com/leaders/2022/11/10/economic-growth-no-longer-requires-rising-emissions