Global Macroeconomic Policies: Impact of Emerging Markets and Stock Market Boom

This report discusses the impact of emerging markets and stock market boom on global macroeconomic policies. It covers the rise in commodity prices due to continuous growth in emerging markets, stock market boom in advanced economies, and the use of fiscal and monetary policies to manage inflation and unemployment.

GLOBAL
MACROECONOMIC
POLICIES

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Due to the continuous growth in emerging and developing markets the price of the
commodities such as oil increases...............................................................................................3
Stock market boom in advanced economies...............................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Macro economics is study of behavior that includes subject that is completely concerned with
the better understanding of various event that includes that includes level of unemployment
employment journal change in the prices and the total and the total amount of commodities
available for further sale. Monetary policy and fiscal policy are the two important tool of
macroeconomics that includes the government spending and the Money supply within the
economy. It is the factor which ensure a better consideration in the market and attain the
equilibrium in the macro economics. The respect of the board will cover the Influence of
continuous growth and developing market with the price of commodity that end up of
commodity. Moreover it also covered the stock boom in the advanced economy with the merits
or the concern policy response in context to the macroeconomics. This is being done by using
aggregate demand and aggregate supply in the market.
MAIN BODY
Due to the continuous growth in emerging and developing markets the price of the commodities
such as oil increases.
Economic growth is defined as the rise in the overall production of goods and services
and these are being compared by the one period of time and can be vary. This is being analysed
in nominal and real terms. In past times, the aggregate growth of the economy is being analysed
in context to the gross national products(GNP). Growth in economics is the subject matter which
explains the rise in the entire production within the economy but always that the aggregated
demand can leads to gain the overall production that is related to the average marginal
productivity. This helps in increasing the income level of the consumer so that they can be free to
buy their favourite backed with their sufficient purchasing power and ensure the quality of life
and their living standards.
It is being analysed by the one of the report that the India is the fasted growing economy
in the economy in the world and it is the best examples of developing countries in the world. It is
also to be noted that the India is the hit hard by the global pandemic and going through the huge
looses in the market. Further more the domestic vaccination campaign also helps them to recover
with the current time so that they can sustain in the market for long period of time. According to

the trade data, it can be said that they are encouraging investment and the certain exports that
helps the economic growth in the year.
Aggregate demand is the sum total of products and services which is being consumed in
an economy. On other hand, aggregate supply defined as the sum total quantity of output firms
which they produce and sell further in the market or can be say that it measures the total supply
or the total demand of the certain goods which is being available for the economy and this also
illustrate that how they both interact within the economy. AD-AS model defines the output and
the price level wit the better relationship with the aggregate demand and supply. It is the theory
which is given by the John Maynard Keynes. In context to betterment in the emerging market
that leads to rise the chances of inflation in the large market. It is also known that the allocation
of money is being done in the proper people so some part of the people are not having sufficient
income level so some are becoming rich and some are becoming more poor in emerging
economies. It is the state of inflation and moreover it will be understand with the help of D-AS
curve below:
It can be says from the above diagram that with the rise in the income level of the
individual that is impacting the overall success of the company. This is being seen that the with
the rise in the inflation that there is the case of inflationary gap of the business. It is also seen
with the rise in the overall consideration of the market that they are not having the appropriate in
the developing economies due to the ineffective allocation of income to the group of people.

Moreover, Inflation referred to the reduction in the overall purchasing power of the
currency for particular period of time and it is also seen that the quantitative estimate of rate and
the trends which decline the purchasing power of the consumer so that they can sustain in the
market for long period of time. It is also important for the economy to manage the state of
inflation so that they can rightly ensures the better working by which they are having the
effective working within the organisation. Inflation leads to slow down the overall economic
development by which the country can cause the recession in the market. It also results in the
unemployment within the economy.
This respective policy are the government & central bank of nations that make sure the
better flow of money with the implementation of better approach in the market with the law and
legislation so that they can reduce the inflationary gap from the economy. This helps them to
take the corrective actions which leads to get the better results for the development ad the
profitability of them. Fiscal policy is being used by the company so that they can analyse the
inflation within the country and manage them in an appropriate manner. Moreover, the
corporation or the people taking more loans when the interest rates are not much higher which
helps the government to have the effective working in taking the corrective measures for them by
which they can sustain in the economy for long period of time. Thus leads to take all the
operations of the government in the right directions. This policy helps in managing the economy
by changing the overall allocation of the taxes and the expenditure of the government. In order to
control the inflation, the government bodies can increases the overall interest rate and on the
dame side they can reduce the their subsidies so that the overall expenditure of the buyer can be
reduced in the market and thus, in such way various nations can enjoy the overall growth and
success of the economy.
Advantage of fiscal policy is it helps in minimising the unemployment as when there is
high unemployment within the economy then the government implement fiscal policy. It means
that there is the increase in the expenditure or the acquisitions with the down fall in the taxation
in an effective manner. In order to meet the overall demand of the economy, it leads to rise the
manufacturing & production which help them to offer more jobs and with the various measures
of fiscal policy the nation can have the huge growth and benefits to them.

Stock market boom in advanced economies.
It is clear from the phrase '' advanced economy'' that it is the country's economy which is
more develop than the economies which are not well-developed. It is also classified as the more
economically developed nation with the sophisticated technical infrastructure with in the
economy. It is the word which is being used by the International monetary fund(IMF) to made
the designate as the world's most develop and advance countries is ''them''. When the country is
having the huge income level so that they can rightly establish the better growth in the market by
which they can rightly establish the huge market growth. It is also clear that when the nation is
having the high per capita income then the signifiant industry also the finance sector is the hybrid
of the global financial system in the market. Additionally, the economy suffers from the huge
market inflation which does not detract from the overall community's consideration. In relation
to such economies , inflation is the most desirable things which leads to rise the overall growth
of GDP but it inflation rises over a certain amount which is the 3%. this is having the major
influence on the net disposable income of the consumer. With the results, it is important that the
economy to keep the inflation under control by which they can maintain the functionality of the
business. When the stock market rises then the given prices increases then the consumer's
purchasing power also increases which results in increasing in the stock market. It is stage in
which the country's enormous marketing is booming.
With the understanding of aggregate demand and aggregate supply in the market, it leads
to have claim that when the demand of the consumer increases in parallel with the rise in the
income level overall overall aggregate demand which is seen in the given diagram.
From the above graph it can be said that the purchasing power increases with the change
in the area demand and inflation in which the demand curve shift from d -d1 Which is indicating
the rise in the total spending of the consumer. Somehow it leads to rise the total pricing of
commodity in the market and it makes difficult for the individuals to buy goods and services they
are seeking for.
Monetary policy reflect the investment and the overall spending of the consumer as a result of
expansionary monetary policy, In such cases bank minimizes their interest rate on loans and
mortgage so that they can inspire a various business to grow by which they can assure a better

working conditions in the economy. Contradictory monetary policy also called as the tight
monetary policy which is the type of economic policy that focuses on the amount of money
available in the nation the nation to restrict them for making the better use. The main purpose of
this policy is to manage the inflation also the contradicting real GDP. When the monetary policy
fails in order to Control the overall inflation it leads to have higher rate of borrowing from the
bank and the allowing bank to lower the overall supply of money in the economy and in the
people investment in the market. The federal revisor This policy so that they can create money
with the aim of acquiring bond from the government and ensuring that proper functioning within
the economy.
CONCLUSION
It is concluded from the above report that macroeconomics is the discipline which ensure to
end power the better working of the economy by utilizing and results in the economy as a whole.
Aint no developing economy expansion effect to the overall senato the overall scenario while
considering the overall interest rate The area demand will be general move in the market as the
shoppers have more purchasing bar which is showing more prominent market that also promote
better economy. Then again in the past financial exchange build the shoppers and influence time
for buying suggesting that the overall progression of cash is the main aspect on the lookout.

REFERENCES
Books and Journals
D’Ambrosio, C.A., 2021. The European Union and the Challenges to Internal Multilateralism: A
Perspective on European Macroeconomic Governance and the COVID-19 Crisis. The
Future of Multilateralism: Global Cooperation and International Organizations, p.131.
Grossi, G., Ho, A.T. and Joyce, P.G., 2020. Budgetary responses to a global pandemic:
international experiences and lessons for a sustainable future. Journal of Public
Budgeting, Accounting & Financial Management.
Hu, L., Han, J. and Zhang, Q., 2018. The impact of monetary and fiscal policy shocks on stock
markets: Evidence from China. Emerging Markets Finance and Trade, 54(8), pp.1856-
1871.
Liow, K.H., Liao, W.C. and Huang, Y., 2018. Dynamics of international spillovers and
interaction: Evidence from financial market stress and economic policy
uncertainty. Economic Modelling, 68, pp.96-116.
Nguyen, C.P., Schinckus, C. and Su, T.D., 2020. Economic policy uncertainty and demand for
international tourism: An empirical study. Tourism Economics, 26(8), pp.1415-1430.
Shah, A.A., Dar, A.B. and Bhanumurthy, N.R., 2021. Are precious metals and equities immune
to monetary and fiscal policy uncertainties?. Resources Policy, 74, p.102260.
Uyar, A., Kuzey, C. and Karamahmutoglu, M.K., 2022. Macroeconomic factors, R&D
expenditure and research productivity in economics and finance. Managerial Finance.
Vidaković, N. and Lovrinović, I., 2021. Macroeconomic Responses to the COVID-19 Pandemic.
Springer International Publishing.