Geography 3422A/B Study Guide - European Debt Crisis
26 Feb 2013
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Document Summary
How the globe can grind to a halt. Both developed and emerging nations are living in the shadow of the globe"s greatest economic threat, the eurozone crisis. The eurozone was expected to fall into recession in 2012, dragging down global economic growth with it. The emerging regions most exposed to the eurozone crisis is eastern europe many have economies integrated with western. Europe and those countries depend of western european bank finance. Risk and reward: channel 1 trade. Trade ties are the oldest, most visible and generally the most resilient channel. Recent declines in metal prices signal slowing economic growth in europe and elsewhere. Exports to the eurozone have grown: channel 2 capital flows. Flows from the developed to the developing world multiplied in the boom years before 2008. They still remain nervous and erratic with investors wary of bad news (like the eurozone) Inflows are less predictable which contributes to increased vulnerability for financing: channel 3 bank flows.
