The Economist magazine article analysis

Economist.com

Stumble or Fall"

The current economic downfall in the United States and throughout the global economy has been documented and discussed in academic, financial, and journalistic circles. Although many in the United States are currently being affected by the negative economy, will developing countries end up paying the larger and more long-term price? The Economist's online article, "Stumble or Fall," questions that very issue. According to the article, developing economies in Asia, Latin America, and Eastern Europe have been booming for the past five years until 2007, growing at a rate of over seven percent. But with the global economic crisis, most of these developing economies have suffered. Although 2008 still showed a growth rate of upwards of six percent, the article suggests that this number may drop to around four percent in the recent future. According to the Economist, "short-term pain is to be expected," but some believe that the economic downturn might have a lasting, negative affect on developing and emerging economies. Economists of this persuasion suggest that a reliance on American consumerism and exports has boosted the emerging economies. As economic crisis in the United States has caused families to save rather than spend, which will cause exports from these countries to decline. While these economists certainly understand the concepts of demand, the article suggests that economic pain for developing countries might not necessarily be the case. Instead, the article suggests that countries who have the ability to stimulate their own economies through savings will be able to better cope with the decreased demand from the United States. Finally, the article suggests that, in the long run, the forecasts for emerging economies are positive, speculated to grow at an annual rate of over four percent from 2010 to 2015. Thus, while developing economies rely on American demand to some degree, their ability to grow economically is left, in the majority, to their own volition.