Global Market Analysis

The questions of who or what governs the global economy is a contested issue, not just facing who or what, but what does it best? Many may say the financial markets govern the global economy, and that these are best to control it when left to their own devices, allowing the markets to grow freely with minimal political or governmental involvement, thus allowing the global economy to thrive. Others see the global economy as a result of political systems and establishments that regulate trade and markets, making for a controlled growth, reducing the risk of market bubbles, manias and eventual market crashes, leading to major fluctuations in the global economy. Establishments such as the World trade organisation or the World bank aim to aid countries with failing financial markets, and this allows economies to grow and remain stable, thus leading to a stronger overall global economy. I feel that while the financial markets are the main controller of the global economy, they require political involvement to regulate these markets, to attempt to prevent major crashes, and allow the markets to continue. Without political involvement, it can be seen that markets run ‘too’ freely, and allows for things like manias and large ‘bubbles’ to form, which in turn result in downturns in the market. Government establishments have also allowed for greater multinational and transnational trading, perhaps at the expense of smaller domestic market as said by Peter Mooslechner, Helene Schuberth and Beat Weber in their book ‘The Political Economy of Financial Market Regulation: The Dynamics of Inclusion and Exclusion, in which it is stated “the state has become far more a facilitator of global market processes than a protector of domestic market struc...

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...not as separate, coexisting or even opposed units, but as interrelated and integral to each other” . These regulating bodies set up trade laws that make foreign markets more attractive to potential investors, and this allows Trans and multinational trading to achieve larger economic stimulation, while at the same time aiming to curb the dramatic effects that market crashes have on the overall global economy, at the same time giving freedom to market actors to proceed with little bureaucracy, and freedom to trade in markets. A conceited effort for markets and government actors to agree of which forms of regulations are required, whilst still allowing a large degree of market freedom would be necessary in fixing the current global economy, with the 2 aspects of the economy working together, not as two separate entities, both with input in governing the global economy.