Global Macro Economic Issues

Global Macro Economic Issues

For any country global macro issues are highly importance because they guide MNC's to profitable investments and for any nation towards economic growth. Its highly important to understand the size of demand or GNI (Gross National Income). These macro issues not only determine countries economic prosperity but also international trade across the globe. The GNI is the market value of final goods and services produced by domestically owned factors of production.

Always check per capita GNI which is calculated by dividing by the total population that means total GNI divided by total population.

The most free economies which are capitalist in nature have highest GNI. The global economist also analyze public & privates domination in the allocation of national resources. According to the Walt Street Report the list of following factors determine the metro economic issues of a country.

1. Trade Policy

a. Exim Policy

b. Foreign Trade Policy

2. Government Intervention

a. Nature of Government Measures

b. Political stability

3. Monitory Policy

a. Inflation

b. Currency

c. Exchange rates

4. Capital flows & investments

a. The interest rates

b. Subsidies applicable towards export & import

5. Wages & Price

a. Wage rate

b. Labor cost

c. Price of factors of production

6. Property Rights

a. Intellectual Property Law- Trademarks, copyrights, patents etc.

b. Abiding by WTO guidelines on TRIP(Trade Related Intellectual Property)

7. Black Market Activity

a. Grey Market

b. Counterfeits

Inflation - It is very important as it affects exchange rates, cost of living & interest rates. Companies have to analyze CPI (Consumer Price Index). This index exhibits the prices of goods in relation to consumers purchasing power.

Higher the inflation rate, it affects the foreign exchange fluctuation by making the exports expensive. Lower the inflation rate, the affect is reversed.

8. Surpluses & Deficits - The country surpluses & deficits need to be monitored before taking any company