Capstone

LOVELY PROFESSIONAL UNIVERSITY LSM (193) Capstone Project on Topic-Comparison of emerging economy through Macro Economic Indicators Submitted to -: Submitted by-: Mr. Vishal Chopra Group: S-025 Mohit Khanna (RS1904B50) Ravish Sharma (RS1904B51) R. Swadeep Chhetri (RS1904B52) Introduction: What is Emerging Economy? Rapidly growing and volatile economies of certain Asian and Latin American countries. They promise huge potential for growth but also pose significant political, monetary, and social risks. Emerging Economies are those regions of the world that are experiencing rapid informationalization under conditions of limited or partial industrialization. This framework allows us to explain how the non-industrialized nations of the world are achieving unprecedented economic growth using new energy, telecommunications and information technologies. An emerging market economy (EME) is defined as an economy with low to middle per capita income. Such countries constitute approximately 80% of the global population, and represent about 20% of the world's economies. The term was coined in 1981 by Antoine W. Van Agtmael of the International Finance Corporation of the World Bank. Although the term quot;
emerging marketquot;
is loosely defined, countries that fall into this category, varying from very big to very small, are usually considered emerging because of their developments and reforms. Hence, even though China is deemed one of the world's economic powerhouses, it is lumped into the category alongside much smaller economies with a great deal less resources, like Tunisia. Both China and Tunisia belong to this category because both have embarked on economic development and reform programs, and have begun to open up their markets and quot;
emergequot;
onto the global scene. EMEs are considered to be fast-growing economies. What an Emerging Market Economy (EME) Looks Like?EMEs are characterized as transitional, meaning they are in the process of moving from a closed economy to an open market economy while building accountability within the system. Examples include the former Soviet Union and Eastern bloc countries. As an emerging market, a country is embarking on an economic reform program that will lead it to stronger and more responsible economic performance levels, as well as transparency and efficiency in the capital market. An EME will also reform its exchange rate system because a stable local currency builds confidence in an economy, especially when foreigners are considering investing. Exchange rate reforms also reduce the desire for local investors to send their capital abroad (capital flight). Besides implementing reforms, an EME is also most likely receiving aid and guidance from large donor countries and/or world organizations such as the World Bank and International Monetary Fund. One key characteristic of the EME is an increase in both local and foreign investment (portfolio and direct). A growth in investment in a country often indicates that the country has been able to build confidence in the local economy. Moreover, foreign investment is a signal that the world has begun to take notice of the emerging market, and when international capital flows are directed toward an EME, the injection of foreign currency into the local economy adds volume to the country's stock market and long-term investment to the infrastructure. For foreign investors or developed-economy businesses, an EME provides an outlet for expansion by serving, for example, as a new place for a new factory or for new sources of revenue. For the recipient country, employment levels rise, labor and managerial skills become more refined, and a sharing and transfer of technology occurs. In the long-run, the EME's overall production levels should rise, increasing its gross domestic product and eventually lessening the gap between the emerged and emerging worlds. Types of Economic Indicators: There are three types of economic indicators: Leading, Lagging and Coincident. Leading : Leading indicators help to predict what the economy will do in the future. Leading indicators are often the most useful for an investor. An example of a leading indicator would be hours worked per employee. If the hours are rising, firms should increase hiring some point in the future. Lagging Lagging indicators confirm what leading indicators predict. Lagging numbers change a few months after the economy does. For example, the unemployment rate is a lagging indicator. Generally, the unemployment rate will fall after a few months of economic growth. If the leading indicator of hours worked is increasing, after a few months the lagging indicator of unemployment should fall. Coincident Coincident indicators mirror what the data is saying. Coincident indicators are generally what is happening right now, for example, the jobs report. If a leading indicator is predicting future job gains, a lagging indicator is saying unemployment is falling, a coincident indicator will tell you the current employment number. Macro Economic Indicators to be studied: Following were the Macro Economic indicators which we have taken for our study they are:- GDP Market value of final goods & services produced often denoted by GDP & when NIT (Net Indirect Tax) is deducted from GDP it becomes the factor cost GDP. GDP = Consumption + Investment + Govt Spreading + Net Import Real GDP: It is the nation’s total output of goods & services adjusted in public change (Inflation is the major difference between Real GDP & Nominal GDP). Growth Rate: The growth rate is the %age increase or decrease in GDP from previous measurement cycle. ,[object Object]

If GDP increases it will grow the business of a firm, increase the income & the jobs vacancies.Ideal GDP growth Rate: Most economists have agreed that the ideal GDP growth rate is in the range of 2-3 %. The rate should neither be fast enough to cause inflation nor too slow to cause recession. Components of GDP: ,[object Object]

Investment: Business & Residential Construction.

Govt. Spending : Net ExportsMethods: ,[object Object]

Product Approach – Calculate the market value of goods & services produced.

Income Approach – Sum of all the incomes received by the producer in the economy.Relationship b/w GDP & Inflation In long run there is no relationship b/w Real GDP & Inflation. But in short run there exists a relationship. Firms are expecting that the prices are higher than normal. So they go out & hire male workers in the real GDP. Unemployment & GDP have an inverse relationship b/w themselves. Inflation has a great effect on time value of money which is the heart of intrest rate. Inflation It means process of rising prices; it is a situation when price if a supply or money is rising. There are 3 types of inflation: ,[object Object]

Galloping Inflation [15 & above]Causes of Inflation ,[object Object]

Increase in minimum support price of food products.

Expectations of future rise in priceEffects of Inflation ,[object Object]

Adverse BOPMethods of Inflation ,[object Object]

GDP DeflationCPI The CPI is the measure of the avg. change overtime in the prices paid by a consumer for a market prospect of consumer goods & services. Measuring of changes in the purchasing power & the rate of inflation. CPI expresses the current price of a ‘basket’ of goods & services in terms of prices during the same period in a previous year to show effects of inflation on the purchasing power. Also called Cost of Living Index. It is a best known lagging indicator. Lagging Indicator: Economic & financial Market indicator, which tend to change only after an economy has already changed or is following a particular pattern. Classification of CPI ,[object Object]

CPI IL (Industrial Labour)Interest Rate It is the yearly price charged by a lender to a borrower in order to obtain loan. This is usually expressed as a %age of the total amount of loan. Factors Effecting Interest Rate: • Expected levels of inflation • General economic conditions • Monetary policy and the stance of the central bank • Foreign exchange market activity • Foreign investor demand for debt securities • Levels of sovereign debt outstanding • Financial and political stability Objective of the Study: Following were some objective of the study they can be:- To find out the potential present in the country economy where the companies can invest. To compare all the possible Macro economic factors of different countries. Research Methodology: Type of Research : Descriptive, Analytical Research Source of Data Collection: Secondary Data through Journals, Websites, Research Papers. Scope of the Study: The main point we have consider while selecting this project was related to study the different indicators of Macro Economics of 10 countries to find out the potential in the countries where in the companies can invest or can even start their operations. Literature Review: Strategy Research in Emerging Economies: Challenging the Conventional Wisdom Mike Wright Igor Filatotchev, Robert E. Hoskisson, Mike W. Peng (14 JAN 2005) introduction to the Special Issue on ‘Strategy Research in Emerging Economies’ considers the nature of theoretical contributions thus far on strategy in emerging economies. We classify the research through four strategic options: (1) firms from developed economies entering emerging economies; (2) domestic firms competing within emerging economies; (3) firms from emerging economies entering other emerging economies; and (4) firms from emerging economies entering developed economies. Among the four perspectives examined (institutional theory, transaction cost theory, resource-based theory, and agency theory), the most dominant seems to be institutional theory. Most existing studies that make a contribution blend institutional theory with one of the other three perspectives, including seven out of the eight papers included in this Special Issue. We suggest a future research agenda based around the four strategies and four theoretical perspectives. Given the relative emphasis of research so far on the first and second strategic options, we believe that there is growing scope for research that addresses the third and fourth. Understanding Business Group Performance in an Emerging Economy: Daphne Yiu, Garry D. Bruton, Yuan Lu (JAN 2005) The prevalent organizational form in most emerging markets is business groups. These groups have typically been viewed through a transaction cost economics perspective where they are perceived as responses to inefficiencies in the market. However, the evidence to date on what generates a positive business group-performance relationship in such environments is not well understood. This study expands the understanding of business groups by employing the resource-based and institutional theoretical perspectives to examine how groups acquire resources and capabilities to prosper. The empirical evidence is based on over 224 business groups in the emerging economy context of China and shows that most of the endowed government resources do not help business groups to create a competitive edge. Instead, those business groups with strategic actions to develop a unique portfolio of market-oriented resources and capabilities are most likely to prosper. The results provide critical insights on the relationship between the initiation of institutional transformation and the desired outcome to be realized by organizational transformation, thus enriching our understanding of institutions and strategic choices facilitated or constrained by organizational resources in emerging economies. Miller and Zhang (1999), through moral hazard elements and game theory applications, the speculative attack timing occurred in the East Asian crisis can be explained under three views. First, the non-existence of creditor co-ordination could imply a stop in rolling over loans (Radelet and Sachs (1998)). Second, unsustainable indebtedness carried out by domestic agents, with assumed guarantees from government, together with highly reversible capital flows, could be halted (Dooley (1997) and Krugman (1998)). Third, a speculative attack could be led by large enough market agents given probable profits come from succeeding, even facing sounds macroeconomic fundamentals in the emerging economy. Organizational slack and firm performance during economic transitions: two studies from an emerging economy Justin Tan, Mike W. Peng (4 NOV 2003) How does organizational slack affect firm performance? Organization theory posits that slack, despite its costs, has a positive impact on firm performance. In contrast, agency theory suggests that slack breed’s inefficiency and inhibits performance. The empirical evidence, largely from developed economies, has been inconclusive. Moreover, little effort has been made to empirically test whether such an impact (positive or negative) is linear or curvilinear. This article joins the debate by extending empirical work to the largely unexplored context of economic transitions. Specifically, two studies, based on survey and archival data (N = 57 and 1532 firms, respectively), are undertaken in China's emerging economy. Our results suggest (1) that organization theory generates stronger predictions when dealing with unabsorbed slack, and (2) that agency theory yields stronger validity when focusing on absorbed slack. Furthermore, we also find that the impact of slack on performance is curvilinear, which resembles inverse U-shaped curves. Overall, our findings call for a contingency perspective to specify the nature of slack when discussing its impact on firm performance. Fred Hu (2004) also finds a negative effect associated with using fixed exchange rate regimes on economic growth. His study focused on China in particular, and the need for this country to liberalize their currency and capital control. He concludes that China must go through a gradual process that will ultimately lead them to a more liberalized system overall. First, they must remove the peg causing them to have a free floating exchange rate. This would cause them to enter a more balanced trading field among their major trading partners. Second, they need to introduce a sound banking reform program, which would stabilize their domestic financial system. Lastly, China should relax their capital control policies. This would assist them in avoiding financial crisis while simultaneously allow them to gain more capital freedom Balazs Egert and Amalia Morales-Zumaquero (2005) analyze the impact of exchange rate volatility and changes in the exchange rate regimes on export volume for ten Central and Eastern European transition economies. The first group of countries started their transition with pegged regimes and then moved towards flexibility. The second group of countries experienced no major changes in their exchange rate regimes in the past ten years. Their results indicate that an increase in the exchange rate volatility decreases exports, and this impact has a delay rather than being instantaneous Guillermo A. Calvo and Frederic S. Mishkin (2003) take on a different view of exchange rate regimes. They argue that macroeconomic success in emerging market countries can be produced primarily through good fiscal, financial, and monetary institutions, and they believe that less emphasis should be placed on the flexibility of an exchange rate regime. They find that when choosing an exchange rate regime, not all countries are able to conform to one type. This is due to each countries particular needs and their economy, institutions, and political culture. Zdenek Drabek and Josef Brada (1998) argue that the flexible exchange rate regime is applicable and appropriate for six countries with transition economies. Within each of these economies, inappropriate exchange rate policies have led to an increase in protectionism by these governments. Because of these policies, the nominal exchange rate is not an indicator of comparative advantage; rather the true indicator is the level of the real effective exchange rate. Drabek and Brada conclude that these transition economies will have to eventually switch to a more flexible exchange rate in order to send more accurate signals to both foreign and domestic investors about the comparative advantages of their country. International Political Science Review (BBVA):- This article focuses on the interactions between politics and financial markets in emerging economies. More precisely, it examines how Wall Street reacts to major Latin American political events. The case study focuses on the 2002 Brazilian presidential elections. The first section of the article provides a critical review of the available literature. The second section presents an empirical study of Wall Street analysts' perceptions of the 2002 presidential elections in Brazil, based on reports produced by leading Wall Street investment firms. The final section uses polling and financial data from previous Brazilian elections to place the events of 2002 in comparative historical perspective. Financial Sector FDI to Emerging Economies Daniel Navia:- This paper reviews the theoretical literature explaining financial FDI, as well as the empirical results on the determinants of financial FDI and its potential effects for the home country. From this revision, we conclude that, at the present stage, the existing theoretical paradigms need to be adapted to explain the recent surge in international banks' local operations in emerging countries financial sectors. Macroeconomic and risk diversification theories would seem particularly well-suited to explain this reality. The empirical literature on financial FDI has concentrated on bank-specific factors and much less so on macroeconomic determinants, particularly push factors where generally only general FDI literature is available. The survey draws on this literature in those cases where no specific results for financial FDI exist. Finally, the effects of financial FDI on the home country are virtually unknown. The literature on general FDI has focused on employment, trade and investment effects, yet the consequences on the profitability and systemic risk of home's financial system remain a topic for debate. Mahasarakham University (1999):- In light of recent currency and Mahasarakham University financial crises, this paper reviews the literature on exchange rate regimes and evaluates the fixed and flexible exchange rate regimes with the focus on the possible choices of the exchange rate regime for emerging market countries. Given the recent trend of World's financial integration, as a result of the globalization, has pushed most countries towards the full financial integration, the analysis touches upon the topics of roles of monetary policy, fiscal policy, currency crises, inflation, credibility, employment, and income under different exchange rate regimes. Overall, the results indicate that the complexity of the economic system and the dynamics of the economic development in emerging market countries have proven the difficulty of sticking to one exchange rate regime for a long period of time. Consequently, an emerging market country should consider a change of the exchange rate regime upon changes in the priority of its economic objectives. European Center for Advanced Research in Economics and Statistics (ECARES) October 2004:- Estache reviews the recent economic research on emerging issues for infrastructure policies affecting poor people in developing countries. His main purpose is to identify some of the challenges the international community, and donors in particular, are likely to have to address over the next few years. He addresses six main issues: (1) the necessity of infrastructure in achieving the Millennium Development Goals; (2) the various dimensions of financing challenges for infrastructure; (3) the debate on the relative importance of urban and rural infrastructure needs; (4) the debate on the effectiveness of infrastructure decentralization; (5) what works and what does not when trying to target the needs of the poor, with an emphasis on affordability and regulation challenges; and (6) the importance of governance and corruption in the sector. The author concludes by showing how the challenges identified define a relatively well integrated agenda for both researchers and the international infrastructure community Centre for Economic Policy Research (CEPR) July 2007:- This paper reviews the literature on the finance-growth nexus within a neoclassical growth framework, placing an emphasis on the policy implications in the current European environment that has placed financial reforms high on the policy Agenda. While more research is needed to establish causality and verify the theoretical channels linking access to finance and growth, firm-level, industry-level, macro, and country-specific studies all tend to show a significant correlation between financial efficiency and economic performance. The empirical evidence hint that in underdeveloped and emerging countries financial development fosters aggregate growth mainly by lowering the cost of capital, while in advanced economies by raising total-factor-productivity John Whalley December 2003:- This paper discusses the potential impacts of services trade liberalization on developing countries and reviews existing quantitative studies. Its purpose is to distill themes from current literature rather than to advocate specific policy changes. The picture emerging is one of valiant attempts to quantify in the presence of formidable analytical and data problems yielding only a clouded image of likely impacts on trade, consumption, production, and welfare. Adewale Adeoye September 2007:- Many experts believe that Foreign Direct Investment (FDI) can provide substantial benefits to emerging market countries and help to speed up the economic development process. National accounts data also shows FDI to be the single largest component of capital inflows to the vast majority of emerging market countries. Thus, it is crucial to determine the drivers and determinants of inwards FDI flows to such markets. There have been several studies on some FDI determinants such as market size and human capital factors; however the role of corporate governance at a national level has been largely neglected. This has mainly been due to the lack of good quality data on corporate governance measures and indicators. The creation of the World Bank Governance Indicators by Kaufmann et al (1999) makes rigorous studies of corporate governance and FDI possible. This study uses the World Bank Governance Indicators to empirically test the relationship between macroeconomic level corporate governance and inwards FDI flows into emerging market countries, using a panel data set of 33 countries between 1997 and 2002. The key finding is that macroeconomic corporate governance has a positive and significant effect on inwards FDI flows, suggesting host country governments and authorities should shape policy in this area to maximize inwards FDI flows. Krishna Chaitanya V. (February 2008):- The paper investigates whether the decline in environmental quality in BRIC economies is due to high energy consumption level which is a resultant of rapid economic growth. We answer these using environmental, macroeconomic and financial variables along with Kyoto Protocol indicators based on panel data from 1992 to 2004. The long run equilibrium relationship between energy consumption and economic growth was examined. Through the panel data, feasible general least squares (FGLS) procedure was employed to estimate the environmental degradation caused by the increase in energy consumption. Pooled regression analysis is used to estimate the relationship between energy consumption and growth variables. We study the impact of excessive economic growth rates on energy consumption levels by means of threshold pooled ordinary least squares (POLS) method. Moreover, our analysis also attempts to fulfill the econometric criticism of the Environmental Kuznets Curve faced. Sectors which can find the potential in other country other than India:- Banking Sector:- Financial sector reforms were initiated as part of overall economic reforms in the country and wide ranging reforms covering industry, trade, taxation, external sector, banking and financial markets have been carried out since mid-1991. A decade of economic and financial sector reforms has strengthened the fundamentals of the Indian economy and transformed the operating environment for banks and financial institutions in the country. The sustained and gradual pace of reforms has helped avoid any crisis and has actually fuelled growth. As pointed out in the RBI Annual Report 2001-02, GDP growth in the 10 years after reforms i.e. 1992-93 to 2001-02 averaged 6.0% against 5.8% recorded during 1980-81 to 1989-90 in the pre-reform period. The most significant achievement of the financial sector reforms has been the marked improvement in the financial health of commercial banks in terms of capital adequacy, Profitability and asset quality as also greater attention to risk management. Further, deregulation has opened up new opportunities for banks to increase revenues by diversifying into investment banking, insurance, credit cards, depository services, mortgage financing, securitisation, etc. At the same time, liberalisation has brought greater competition among banks, both domestic and foreign, as well as competition from mutual funds, NBFCs, post office, etc. Post-WTO, competition will only get intensified, as large global players emerge on the scene. Increasing competition is squeezing profitability and forcing banks to work efficiently on shrinking spreads. Positive fallout of competition is the greater choice available to consumers, and the increased level of sophistication and technology in banks. As banks benchmark themselves against global standards, there has been a marked increase in disclosures and transparency in bank balance sheets as also greater focus on corporate governance. Indian Information Technology Sector:- The Indian Information Technology sector can be classified into the following broad categories - IT Services, Engineering Services, ITES-BPO Services and E Business. IT Services can further be categorized into Information Services (IS) outsourcing, packaged software support and installation, systems integration, processing services, hardware support and installation and IT training and education. Engineering Services include Industrial Design, Mechanical Design, Electronic System Design (including Chip/Board and Embedded Software Design), Design Validation Testing, Industrialization and Prototyping. IT Enabled Services are services that use telecom networks or the Internet. For example, Remote Maintenance, Back Office Operations, Data Processing, Call Centers, Business Process Outsourcing, etc. IT sector is attracting considerable interest not only as a vast market but also as potential production base by international companies. Therefore India is considered as a pioneer in software development and a favorite destination for IT-enabled services. The rapid growth in the sector is a consequence of access to trained English-speaking professionals, cost competitiveness and quality telecommunications infrastructure. Companies operating from India are able to leverage the advantage of the Indian time zone to offer 24 x 7 services to their global customers. Several world leaders including General Electric, British Airways, American Express, and Citibank, have outsourced call centre operations to India.E Business (electronic business) is carrying out business on the Internet; it includes buying and selling, serving customers and collaborating with business partners. The following are some of the strengths of the Indian IT sector: ,[object Object]

Quality of work;· Initiatives taken by the Government (setting up Hi-Tech Parks and implementation of e-governance projects); · Many global players have set-up operations in India like Microsoft, Oracle, Adobe, etc.; Following Quality Standards such as ISO 9000, SEI CMM etc. · English-speaking professionals; · Cost competitiveness; · Quality telecommunications infrastructure. The following are some of the weaknesses of the sector: · Absence of practical knowledge; · Dearth of suitable candidates; · Less Research and Development; · Contribution of IT sector to India’s GDP is still rather small; · IT development concentrated in a few cities only. Real E- State Sector:- India is the world’s largest democracy in terms of population, with India’s Central Statistical Organization (CSO) estimating a population of 110 crore people as at March 31, 2005. According to the World Bank, India was the 10th largest economy in the world in the year ended December 31, 2005, with a GDP in nominal terms estimated to be US$ 750 billion. This improved economic condition augurs well for Real Estate Sector in India. The term ‘real estate’ covers residential housing, commercial offices and trading spaces such as theatres, hotels and restaurants, retail outlets, industrial buildings such as factories and government buildings. Real estate involves the purchase, sale and development of land, residential and non-residential buildings. The activities of the real estate sector encompass the housing and construction sector also. Real estate is a major employment driver, being the second largest employer, next only to agriculture. This is because of the chain of backward and forward linkages that the sector has with other sectors of the economy. About 250 ancillary industries such as cement, steel, brick, timber, building material etc. are dependent on the real estate industry. A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times. Contribution of housing and real estate to India’s GDP is meager 1% against 3-6% of developing countries. If the economy grows at the rate of 10%, the housing sector has the capacity to grow at 14% and generate 3.2 million new jobs over the next 10 years. The Indian real estate sector can be bifurcated into the organized and unorganized segments, with the unorganized segment accounting for over 70% of the housing units constructed. The organized segment comprises private real estate developers and government or government affiliated entities. The industry is highly fragmented with most of the real estate developers having a city-specific or region specific presence. Data Analysis & Interpretation:- India:- Year20062007200820092010Inflation 4.25.36.48.310.9 Year 20062007200820092010GDP 8.49.297.47.4 Year 20062007200820092010unemployment 8.97.87.26.810.7 Year 20062007200820092010Interest rate 5.56643.38 Year 20062007200820092010CPI 4.24.25.36.48.3 USA:- Particulars 20062007200820092010GDP 32.22.111.5 Particulars 20062007200820092010Interest Rate 5.23.10.630.250.8 Year20062007200820092010Unemployment rate4.55.66.29.69.8 Year20062007200820092010CPI2.53.22.52.93.8 Japan:- Year 20062007200820092010Unemployment rate 4.443.84.55 Particulars 20062007200820092010GDP 22.51.9-84 Particulars 20062007200820092010Interest Rate 0.10.20.80.10 Particulars 20062007200820092010Inflation Rate 0.10.20.40.20.2 Year 20062007200820092010CPI 0.10.30.30.11.4 UK: Particulars 20062007200820092010Inflation Rate 1.61.92.10.83.3 Particulars 20062007200820092010GDP 3.532.22.81.6 Particulars 20062007200820092010Interest Rate 4.25.55.80.20.5 Particulars 20062007200820092010Umemployment rate 54.75.36.47.7 Year 20062007200820092010CPI 1.42.132.33.6 China:- YEAR 20062007200820092010UNEMPLOYMENT 11.310.211.16.412 YEAR 20062007200820092010INFLATION 22.36.2-14.2 YEAR 20062007200820092010INTEREST 5.86.37.55.45.6 YEAR 20062007200820092010UNEMPLOYMENT 4.2444.24.34 Year 20062007200820092010CPI 4.11.81.54.85.9 Russia:- YEAR20062007`200820092010UNEMPLOYMENT7.87.279.26.8 YEAR20062007200820092010INFLATION119.312.1138 Year 20062007200820092010GDP 6.46.78.15.6-7.9 YEAR 20062007200820092010INTEREST1211.310.113.28 Year 20062007200820092010CPI 11.512.79.8914.1 Interpretation:- After analyzing the major factors of Macro economics of various country economy we came to known that:- ,[object Object],The main factors to be considered in case of India are as follows:- ,[object Object]

GDP: due to the increase in the Inflation of the country GDP of the country decrease to 7.4 by 9 which shows that the market value of the product and services provided is demanded less in quantity.

Unemployment: As the result of the above two the unemployment rate is also increasing as company fails to expand their business and recruit new employees in the organization.

Inflation: The inflation rate is increasing day by day but the increment is very less as it is the most powerful economy the increased costs can be easily absorbed as Per Capita income of the country is much more comparing to the other countries.

Unemployment: As there is less scope for the business to grow in an economy of USA the unemployment rate goes up but there is various type of scheme by the govt. to pay off some fixed amount of money to those people for their livelihood.

GDP : All the companies are at their peak stage but not able to search for new scope to grow their business as a result of which the GDP is decliningIt is suggested that it is not suitable for any company to sustain in the US market on their own but can fruitfully conduct their business by having a Joint Venture with any of the US Company. ,[object Object],Following were some findings after analyzing the Macro Economic indicators of China. ,[object Object]

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