Why do financial crises occur? Will the global economy create more crises or solve future problems?

Hifsa paper | Business & Finance homework help

When there’s an inequity between countries or certain sectors of the economy become over-leveraged, financial crises can occur. People may lose confidence in financial markets and become more cautious about investing.

Because of its interconnectedness, the current global economy offers both prosperity and instability. While increased trade and investment has resulted in faster growth rates all around it has also made many countries more vulnerable to external shocks. This could lead to widespread loss as lenders will be less likely to lend more money until the debt is paid.

Hence with all factors considered it is hard say whether more crises will arise future or not – although given recent history seems like chances high that some degree instability remains unavoidable especially considering how quickly markets can change direction nowadays! Lasting though, I believe the key question is not to predict exact outcomes. It should be about proactively addressing potential problems before they occur. This will ensure that global economic safety in the long-term.

This is a snippet preview, get a complete custom solution
Access a Complete Custom-Written Paper from Our Writers, Now!!