The Correlation Between The Economy And The International Economic Institutions

2258 WordsJun 20, 201610 Pages
Introduction
The United States of America 's economy has been on the decline for several years although there has not been much official acceptance of the relative decline. This decrease has in no doubt put a lot of pressure on the development and sustainability of International Financial institutions. This paper discussed the perceived/relative decline, the development of some of the international economic institutions, the difficulties faced by these establishments when setting them up. The paper will also look at the correlation between the US economy and the International Economic Institutions. Discussion "The first "decline" of the U.S. economy occurred" (Dezhao, 2006) back in the 1930s during the capitalist world 's great economic…show more content…
2008). The U.S. economy for sure remains high and will see a relatively long period of development due to the emergence of fresh scientific and technological innovations. As previously stated, the third "decline" of the US economy occurred in 2008/9, the international financial crisis. The century-rare global financial crisis and world economic recession originated from the US. The United States at this stage was the world financial centre and sole superpower in the world (arguably). Once again the US was the creator of the crisis. Mid-September to late October 2008 - Leman Brothers Holding Inc., the third largest investment bank in the United States announced its bankruptcy ( Swedberg, 2008). Goldman Sachs as well as Morgen Stanley; the top two American investment banks have transformed into holding companies of banking corporations. By this time, all the top 5 investment banks of the US had collapsed. Washington Mutual Inc. America 's largest savings and loans bank got overtaken by the Federal Deposit Insurance Corporation (FDIC) and became the largest bank going bankrupt in American history. Large commercial banks such as Bank of America, Citibank and JPMorgan Chase & Co. suffering from losses and their stock prices shrinking by big margins were also in imminent danger. The US economy has long been the pillar of most global economic institutions. The US economy is the backbone of the IMF, World Bank among other major financial institutions. The
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