Sample Economics Case Study Paper on A Sustainable Future

  1. Mapping the future of countries

In the video, Hanna states that the natural borders in place have done more to increase conflict in the world. It is true that these borders have been constantly changing, with the latest addition being South Sudan, a nation that is still volatile and may see its borders still change. In Syria, the threat of terrorism caused by religious and political shifts might see borders change, with the Islamic State hoping to amalgamate the region into one caliphate. Besides conflicts, the existence of raw materials has also affected these borders, as nations struggle to protect resources. This has been especially evident in the the Middle East and Africa where the control for oil reserves has left many nations fragile. Countries like the Congo and Burundi are still volatile as a result. Khanna opines that the inertia of the existing borders is too high and they will have to change, an opinion that I also concur with. The world has, however, seen enough conflicts, wars, and skirmishes leading to the change of borders, and it should net let the other ones change while pain is being inflicted. The reality of globalization is here with us, and achieving peaceful globalization will result in a world where borders no longer matter to anyone. One of the best ways to do this is by infrastructural development, where interlinks of networks connect people without the restrictions of traditional borders.

  • Shadow Banking

The financial system today is filled with banks and non-bank financial institutions that behave like banks, but which are not regulated. These institutions which include hedge funds are called shadow banks, and looking at the current financial system, it can be said that they are the cause of the next financial crisis. These shadow banks were introduced to escape the high cost of regulation in banking and in recent years they have grown in number, and are now larger than formal banks. The threat of shadow banks lies in their unregulated status, which makes it hard for clients, governments, shareholders to predict their operations, and thus are likely to be mismanaged or their mandates exceeded. Due to the high risk-high return nature of these shadow banks, shareholders want a fast return on income, and thus the goal is never sustainability, but profitability in the short-term. These shadow banks have exhibited signs of collapse in the past, such as the bankruptcy of Long-term Capital Management in the mid-1990s. The large nature of shadow banks makes them too big to fail in some economies, and the certainty of a government bailout in case of insolvency makes them notorious in circumventing authority. Another issue with shadow banks is that they also have a lot of money invested in clearinghouses that act as intermediaries between them, and the insolvency of clearing houses might lead to the collapse of the whole system. These clearing houses currently have no insolvency regime, something that should also be looked into to mitigate the effects of the financial crisis that is surely looming.

  • Megacities

In today’s world, there has been an infrastructural revolution that has seen over 64 million kilometers of roads, four million kilometers of railway, 2 million kilometers of pipelines, and 1 million kilometers of internet cables built. Despite this development that has enabled people, goods, resources, and knowledge to be mobile, there is still a need to expand the current facilities to accommodate the needs of a growing population that are three times the current infrastructural capacity. Over the next 15 years, cities are expected to accommodate 2/3 of the world’s population, with over 50 megacities being present in the world. Infrastructural spending for these cities will also far exceed defense budgets, and the interconnectedness of these cities will matter more to finance and world affairs than national boundaries. This is already happening in large cities that have GDPs larger and populous than some nations, and as their sizes grow, they will have more influence on boundaries.

  • Donald Policies v. Hillary Policies

Both Donald Trump and Clinton have made many assertions on how they would boost the economy through various policy initiatives. Trump wishes to eliminate various taxes including inheritance, marriage, and Alternative Minimum Tax. He also wishes to quadruple the standard deduction, add a childcare deduction, and reduce the corporate tax from 38.6% to 15%. Trump, however, wishes to eliminate the ‘carried interest’ deduction. Trump also hopes to impose countervailing duties on all imports from China and institute a 35% tariff on Mexican imports. On spending, Trump wishes to eliminate some state departments such as the Department of Education and the Environmental Protection Administration, Trump also wants to spend over $100 billion a year over ten years rebuilding U.S. infrastructure, and over $500 reforming the veteran’s affairs system. Hillary Clinton, on the other hand, wishes to impose a higher tax on high earners and give tax cuts to the middle class and small businesses. She also hopes to introduce a new tax on high-frequency trading and an exit tax for companies that relocate overseas. Clinton also hopes to introduce a 15% tax credit on corporations that share profits with workers. On spending, Clinton hopes to utilize $300 billion over 5 years upgrading the infrastructure. She would also provide workers with paid family and medical leave and not privatize social security. The policies of presidential candidates have always mattered to electorates, but these elections have been dogged by issues regarding the characters of the candidates and social issues such as immigration. Ultimately, the economy will always matter to the nation, and this is why both candidates were keen to focus on infrastructural development. Trump eventually won the day, with the lower-tax policy being popular especially for the youth who are increasingly becoming entrepreneurial.

  • A country with no water

Water is essential in the building of infrastructure so that without water there will be little development. It is also important for crop production and human development, with water-scarce areas experiencing high death rates and low life expectancy. In water scarce environs, people also spend most of their time searching for water rather than engaging in development work or socializing. The world has been experiencing a water scarcity that will be exacerbated by climate change and rapid population growth. Many technologies in use today are not sustainable, such as the building of dams and catchments on rivers, and thus technological innovations will be needed in future. One of these innovations is desalination, where water is pumped from the ground and the water purified. Such processes are important especially in arid areas, and more funding should be put into developing them, as well as investigating their environmental impacts. Water scarcity will affect tomorrow’s development, thus it is our duty to innovate as a way of conserving tomorrow’s water.

  • Private Investment in the Developing World

There is a debate in many circles on whether private equity firms have had an overall positive impact, particularly in the developing world. An economic slowdown in many developed nations has led to a decrease in net returns and interest rates, but these rates have increased in developing nations. Many African nations, for example, have high grown rates that reach double-digit figures. There have been structural advancements that have enabled easier entry into these markets, and as a result, many private equity firms are investing in these destinations. The threat of private equity firms lies in their size, reach, and structural malpractices in these nations. Rampant corruption in many developing nations, for example, has enabled many multinationals to operate unregulated and misuse public resources for private benefit. They have worked together with rogue government officials to steal public and private land, flout environmental and labor regulations, and evade taxes. They, however, give back to the community in terms of creation of jobs and bringing resources like schools and hospitals closer to the people. Presently, these private equity firms are seen by many to have an overall negative effect on the community, and there is a need to redeem their image in the public eye. This will be through instituting regulations to govern their operations and educating the masses on governance so that they can require more accountability from these institutions as well as their leaders.

  • Capital Controls

One of the reasons posited for the unsavory businesses practices exhibited by multinationals discussed in the preceding article is that there is no regulation of money flows. In the wake of globalization, a call for the liberalization of markets has prompted many developing nations to open up their markets without instituting the necessary regulatory controls. The result has been unregulated money flow that has led to asset bubbles and an expansion of debt as companies have pursued short-term profitability. As the idea of western capitalism has spread across the world, many financial decisions are made based on profitability rather than on other factors such as policy and sustainability. Globalization also means that an effect on one nation or region has a domino effect on the entire world. To prevent the volatility of capital and rein in money flow, many people have suggested global capital controls that will ensure uniform regulations on capital movements and accountability.

  • Let the environment guide our development

Many scientists agree that the human imprint on the environment has undermined the ability of the earth to sustain human development in the future. Rapid population growth and a consumption culture have led to a sharp decline of ecosystem functions over the last 50 years, and present efforts at curbing climate change and ecological degradation do not seem to be enough. Land, water, phosphorous, and ocean use is also fast approaching the danger zone and if the current rate of uptake is maintained, humans will have a crisis on these commons too. The ecology is non-linear so that greenhouse gas emissions in China will affect cyclone formation in The Gulf or the sea level in a South American nation. Humans have a moral obligation to future generations to preserve the ecosystem, and thus their decisions on consumption and spending must be made with the environment in mind. This may be through various innovative mechanisms that will improve reliance on renewable energy and efficiency in production processes. It is necessary for the world to be proactive rather than reactive when it comes to environmental conservations, and nations, individuals, and corporations should help in this endeavor.