Many of you may remember a blog post a little while back talking about Greece's bailout, and its short and long-run implications. Many supported the bailout as a solid short-term solution. However, today Wall St. received a direct hit from this bailout, as explained in the above article. Does this change your opinion on the bailout? It seems easier to talk about the benefit of the bailout when it is taking place overseas, but sometimes the overall global effect can be overlooked.
I think this article really speaks to interconnectedness of the global economy. Any country instability or volatility will reverberate throughout the global economy. This article made me think about our class discussions on risk management. I feel like risk is magnified as globalization increases the interconnectedness of the world economy. Default of any single country economy could spell disaster for their creditors and any country they associate with.
ReplyDeleteI couldn't agree more Jake. It may be a completely different conversation if the bailout were occurring on this side of the pond. I feel as though because Greece has been in the news for these wrong reasons for so long, a country could hedge against risk with that country. Sort of the "I know what's coming so let's act now" argument.
ReplyDeleteI fully agree with both above comments...there truly is such thing as a global economy now...all of the worlds markets are influenced by each other...that is why Greece and the rest of the Eurozone need to be paid close attention to. Bailouts are never a good thing and good fiscal and monetary policies in Europe is essential to the well-being of the global economy
ReplyDeleteI agree as well.
ReplyDeleteI think this just reinforces the idea that different government need to be wary of their actions and their own economies because its clear that the impacts of certain economy's actions can cause devastating effects worldwide. As Ryan's post points out, this effect could be even more prominent when it comes to risky behaviors and the financial sectors of different countries being woven together and intertwined with one another.
ReplyDeleteI agree Grant. There can be some serious long term effects that come with bailouts and it can effect many different economies. Bailouts arent a good thing, and policies need to be reviewed to prevent this from occurring again. As Jon said, Europe is essential to the well-being of the global economy and for that reason governments need to be aware of their actions for the well-being of our future.
ReplyDeleteAs we discussed in class briefly tonight, the economies in many countries have started to become so reliant upon bailouts. Although they do work sometimes, should we continue to rely upon bailouts for any future problems.
ReplyDeleteI agree with Mike and Ryan as well. As globalization becomes more of a factor in the well-being of almost every country, the economic stability of each country we are associated with is extremely important.
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