Does Economic Efficiency Require Greater Inequality Term Paper

Does Economic Efficiency Require Greater Inequality - Term Paper Example The variables require immediate and unified responses in order to prevent them from negatively affecting economic initiatives that have brought nations together in divergent regions and disciplines all over the world. Multiple complement factors that have facilitated division amongst nations have had a direct correlation on economic inefficiency in different regions around the world that may lead to a dramatic increase in this type of inefficiency in the future. Note the following: Many developing nations, for a host of reasons, may rapidly be falling out of favor with some of the world's leading multinationals. That's a worrisome prospect considering that FDI flows have been the largest source of external financing for the developing nations over the past half decade. According to the World Bank, FDI flows accounted for 60% of total private flows to the developing nations over the 1995-99 period; last year, the share was nearly 70%. So if our hunch is right, and multinationals are o n the verge of de-camping from a number of developing nations, many nations stand to lose a critical prop of external financing. This, in turn, could introduce a whole new and volatile dynamic to the global economy and to the world equity markets. Global Economic Forum, Global: The Bad News Bulls As you can see, any scenario that leads to a reconfiguration of global treaties and alliances has a highly probable chance of reducing economic efficiency on a region-specific and global level. Diplomatic relationships and strategic continuity between nations in regards to economic initiatives will play an integral part in how efficient these economic endeavors are in the future. Reconfiguration factors pose significant threats to economic efficiency across the global economic allies and treaty initiatives.     Ã‚