The USA's Role and Influence in the Global Economy: A Report

This report provides a comprehensive analysis of the USA's contribution to the world economy. It begins with an executive summary and introduction, followed by an examination of the USA's recent economic developments, including GDP growth, public debt, and household income inequality. The report then evaluates key factors influencing the USA's economic role, such as technology, international trade, economic development, globalization, and manufacturing. Furthermore, it discusses strategies for maintaining and enhancing the USA's political and economic power, including fiscal policy, government statistics, infrastructure, energy production, graduate student visas, and defense spending. The report also addresses the importance of international trade. The analysis concludes with a discussion of the USA's declining trend in global economic contribution over the years, emphasizing the need for strategic improvements to maintain its economic influence in the global market.

USA CONTRIBUTION
TO WORLD ECONOMY

Table of Contents
USA CONTRIBUTION TO WORLD ECONOMY.......................................................................1
INTRODUCTION...........................................................................................................................3
Executive summary......................................................................................................................3
Part 1................................................................................................................................................3
1) USA's Recent Developments...................................................................................................3
Part 2................................................................................................................................................5
1) Evaluation of Priority Factors.................................................................................................5
2) Maintaining and Enhancing Political And Economic Power..................................................6
3. International trade....................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10
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INTRODUCTION
Executive summary
Globalization over the past years has been increased to a great extent due to the changing
need of business as well as people. In order to provide additional services to its customers,
businesses have taken a route to foreign markets to serve large customer base and provide them
with the utmost comfort. This report deals about the impact of USA's recent developments in
globalization on the world’s economy and further more how USA can maintain and enhance its
position in the world in relation with the economic and political power. Various national markets
are joining hands which have created a buzz around the global markets and due to taste and
preferences of consumers are changing rapidly and trade barriers have started to loosen up it is
easier to sell globally.
PART 1
1) USA's Recent Developments
United States Economy is often seen as leader of the world economy and thus any default
or slowness in United States economy becomes a concern for the other countries. As per the
reports, USA's economy is the second largest in relation with purchasing power parity, which if
talk about numbers goes to 22% of Global GDP and GWP is 17%. U.S Dollar is the international
currency used in the international transactions(Chen and et.al, 2016). US government has full
belief in their economy to reimburse its debts, if any. Talking about the developments of
economy of USA in 21st century, USA has experienced the crisis in 2008 which was due to the
derivatives market and subprime mortgage crisis which eventually resulted in the decline of
dollar value. USA's GDP grew by 1.7% from 2000 to 2014. USA's Public debt has grown higher
in recent years which are:
 In 1980, it was $909 billion, equals to 33% of America's GDP.
 In 1990, it was $3.2 trillion or 56% of GDP.
 In 2001, No change was witnessed in the public debt.
 In 2009, it was nearly 80%.
In addition to those, it was estimated that government cost for servicing the debt can exceed
$700 billion up to the year 2019.The household incomes in United States have become more
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unequal by 2008 due to the economic recovery(Reich , 2017). Middle level household wealth fell
35%, from $106,591 to $68,839 in the period 2005 and 2011. Due to these developments over
the years in US markets the economy has been benefited and business culture has developed
more. Also government joining hands with the other nations for free flow of trade has motivated
the US entrepreneurs to go beyond the boundaries of USA.
2) Contribution To World Economy
Capital markets play a vital part in the operation of an economy since, capital is use to
establish the economic output for a nation. Trade has increased the international scope due to
recent developments in technology, transportation, communication(Kothari, Demaria and
Acosta, 2014). Trade in different countries with various people has now been more practical
rather being a theory. For doing an international transaction, the currency which is needed is US
dollar, it is international currency for exchange of goods and services. So that is the reason why
whatever happens with US economy it impacts whole world economy in a significant way. One
of the important or strongest advantage of US economy has over other economy is their buying
power, when dollar prices are not of that much worth as it used to be, Americans are buying less.
Many nations who exports goods to US would have low demand for their products in this
scenario. Countries with unstable economies could suffer dramatically. So in order to play safe,
US government has adapted certain measures to reduce reaction of this vicious cycle by
encouraging free trade practices with the foreign countries. Economic value can be evaluated in
terms of overall level of a variable contribution to change. USA's contribution to the global
economy has declining trend over the years. Over 55 years, this change has occurred due to
various reasons. Today, US GDP contributes 22% of world economic output; the role of America
in global economy has declined 50% since 1960(Peng, 2016). In old days when everything was
stable, products were stamped with "Made in America" and those local made goods were
reflection of the quality. America's business industry was full of cash and firm's were rapidly
evolving, which came in the eye of the federal government. Washington saw this as a revenue
source and increased rules and regulations, taxes to such an extent that it began to shut down the
very businesses that were doing good. As government inserted itself more deeply in the matter,
the private sector counter attacked with a powerful effort(Decker and et.al, 2014). A push-pull
strategy created changes in the tax code. Despite knowing about corporate tax rates which is
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highest in the world for U.S., their portion of revenue is lower than it was back in 73 years. So,
this is what USA's scenario into the world Economy is and it needs to be attended carefully and
efforts should be made in order to examine what could the US government can do to bring more
power to its economy. Well in order to have the things again on track, US government needs to
take road to improvement(Voigt and et.al 2014). They have to maintain its exports imports in
more effective manner and create an environment where everyone is motivated to contribute
towards the economy.
PART 2
There are three main points that should priorities the USA in over the next 3 years. These
are discussed as below:
1) Evaluation of Priority Factors
There are so many factors which have led to the condition of US economy to its decline
trend and have impacted the world economy also over the past years, which have taken an urge
for experts, financial analysts and other interested parties to look for the factors which are the
reason for this outcome and try to overcome the issue. The priority factors on which USA needs
to look immediately in order to get things right on tracks are:
 Technology: In this environment, the aggressiveness of economic system depends on
their power to leverage new technologies (Sachs, 2015). Growth in IT sector and
communication technology has played a part in making global marketplace successful in
achieving the heights like 24-hour trading, anything thing happens in one financial
market is spread with the blink of an eye into the world markets. At this point of time
where growth is slow, many countries are looking for the policies which will charge their
growth and create new jobs(Five ways technology can help the economy, 2013). The
number of subscriptions in terms of mobile is approaching towards the new heights. Five
common economic effects which is affected by technology is: Job Creation, Contribution
to GDP.
International trade:- It is business activity in which goods and services are exchanged
from one country to another. This activity calls as export and import in which purchasing goods
terms as import while selling considers as export. In this regard, it is interrelated with nation's
economic growth and effectiveness.
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Economic development:- various tools and techniques are related with financial
development for which transaction of goods is implemented. However, various sectors get
affected such as economic, education and employment. Therefore, nation's effectiveness is
gained through this system effectively.
Globalization:- Under this system, investment policies are applied for investment within
countries of the world. It is helpful for overall development of entire nations and enhancing
efficiency at high level.
Manufacturing: USA needs to pay attention of manufacturing because there are many
nations those which are exporting goods from cheaper economical nations. This will help in
reducing manufacturing cost and by this way they will be able to provide low price products to
consumers. That will help in the economic development of USA. International trade will support
the country in increasing foreign investment thus overall foreign exchange will get enhanced in
the USA.
2) Maintaining and Enhancing Political And Economic Power
Over next four years, U.S. President Donald Trump can help US remain competitive in
this fast and furious globalizing world. The markets which are emerging has been seen garbing
the larger portion of world's economic pie which has caused America to slip to 7th in the report
of global competitiveness(Hassel, 2014). With so many problems or issues surrounding like
broken tax system, health costs, etc needs or are kind of demanding an attention. Five ideas to
Maintain and Enhance the Political and Economic Power of US are:
 Avoiding The Fiscal Cliff: Breaking the political Gridlock with the reduction of debt
will create a route to go a long mile in restoring the foreign and investor confidence. If
this is not done this will cause U.S. dollar's reserve currency may come into question,
which eventually will cause disaster for the US economy(How the United States Can
Maintain Its Global Edge, 2012). Faith in US government was declined which caused or
it was the major reason for which U.S. slips in the competitiveness report.
 Strengthen Government Statistics: The world is complex and in this complex world a
government may suffer from dated data or fraud data and it's impossible to craft the
sound policies with fraud data. So in order to maintain its relevancy over the economy
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US governments should have an examining of the data whether it is fraud or reliable can
be trusted upon.
 New Infrastructure And Energy Production: It has been said that in order to be the
best you need to look good and this saying applies here also, US can't compete with
crumbling bridges, ports and roads. America rank on the basis of infrastructure is 25th
among other nations which is not promising at all(Hoekstra and Wiedmann, 2014). In
order to improve and enhance its power US needs to expand into domestic energy
production capabilities. Whether its renewable or non-renewable which in turn will
reduce the imports, electricity costs will be reduced and boost employment. With low
interest rates and returns high on infrastructure, there may never be a better time to start
for US governments.
 Graduate Student Visas: With unemployment only up to 8%, many would be
wondering that America has the labor shortage in various important areas which includes
science, technology, maths, engineering or STEM. US haven't have expanded its
immigration system from more than a decade but others have changed it dramatically.
This is a crucial situation because highly educated immigrants always have boosted
American innovation. Exporting this kind of talent after graduation only hurts US global
competitiveness. So they need to improve their retention ratio of students in order to be
more economically competitive.
 Smart Power And Defense Cuts: US governments has always invested more on defense
if compared to other countries, more than $750 billion per annum which includes debt too
has been spended on the defense department. This is what competitive disadvantage is -
they are focusing more on money, finances rather than smart power. A Smart Power for
US governments is to have multilateral efforts, cheaper hardware's like drones,
diplomacy should be increased which can help the country being safe with optimum
utilization of resources.
Above mentioned tools impact on country's effectiveness. It is because various
implementation and enlargement of all sectors get enhanced. In this regard, several policies are
implemented for US government and public welfare. However, economic and non-monetary
factors get implemented.
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3. International trade
It is another stream in which it can maintain and rule over the world. It is the biggest
economy in the world. Almost, every country trade with USA for its gods and services. USA
also exchange its services from many countries. USA need to adopt some more powerful
techniques which can make them stronger in the international trade market area.
There are some area which has seen as the development factors in next 3 years in USA.
According the view point of Chen and et.al (2016), it has been evaluated that in three years it
will be number in the technological areas. Although, it has already been number one, but the
cited country aim t develop more in the stream of technology. In the view point of Hassel (2014)
, it has been said that the country also aim to develop the synergies and its core competencies
which will lead them to be the global leader across the world. Furthermore, USA can maintain
and enhance its position in the world through following factors:
 Social: This factor illustrates that being societal and performing for the betterment of the
society will create and develop a god image for the company and its citizens. To sustain
and maintain its development, USA can adapt some initiatives in the field of social
factors, by following the rules and regulations.
 Ethics: This signifies that the cited country needs to follow all the ethical norms related t
different aspects so that they can attain sustainability.
CONCLUSION
As per this report it has been figured out that US government has created a significant
impact in building and maintaining the world economy. Slowness in united states economy
becomes a concern for the other countries. As per this report US economy has been developed in
the recent times and have contributed in the world economy up to a great extent which has made
US economy being recognized as the leader of the world economy. But when there are positives
their are negatives too so US economy has decline too due to various factors. The above report
has discussed 3 of those factors which has been taken on the priority basis. The report discussed
the factors which should be undertaken in order to make US economy more powerful in terms of
Economical and political way.
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REFERENCES
Books and Journals
Chen, W.Q.and et.al, 2016. Building the material flow networks of aluminum in the 2007 US
economy.Environmental science & technology,50(7), pp.3905-3912.
Decker, R., and et.al, 2014. The role of entrepreneurship in US job creation and economic
dynamism. The Journal of Economic Perspectives, 28(3), pp.3-24.
Hassel, A., 2014. The paradox of liberalization—Understanding dualism and the recovery of the
German political economy. British Journal of Industrial Relations, 52(1), pp.57-81.
Hoekstra, A.Y. and Wiedmann, T.O., 2014. Humanity’s unsustainable environmental footprint.
Science, 344 (6188), pp.1114-1117.
Kothari, A., Demaria, F. and Acosta, A., 2014. Buen Vivir, degrowth and ecological Swaraj:
Alternatives to sustainable development and the green economy.Development, 57(3-
4), pp.362-375.
Peng, M.W., 2016. Global business. Cengage learning.
Reich, M., 2017. Racial inequality: A political-economic analysis. Princeton University Press.
Sachs, J.D., 2015. The age of sustainable development. Columbia University Press.
Voigt, S., and et.al 2014. Energy intensity developments in 40 major economies: Structural
change or technology improvement?. Energy Economics, 41, pp.47-62.
Online
Elena Kvochko, 2013. Five ways technology can help the economy[Online] Available through:
<https://www.weforum.org/agenda/2013/04/five-ways-technology-can-help-the-
economy/>. [Accessed on 17thFebruary 2017].
PETER MARBER, 2012. How the United States Can Maintain Its Global Edge
[Online] Available through: <https://www.theatlantic.com/international/archive/2012/11/how-
the-united-states-can-maintain-its-global-edge/265011/>. [Accessed on 17thFebruary
2017].
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