Global economic analysis is the study of the global economy as a whole, with the intent of understanding global economic forces for the purpose of making advised economic decisions for personal, institutional, or national gain. The idea of a "global economy" has been made possible through the process of globalization, by which goods and services from many countries are readily available on a global scale. Global economic analysis is used to elucidate the economic forces that guide the worldwide distribution of goods, services, and currencies. An understanding of these forces can grant insight into how best to run an international business or how to enact policies that benefit a given domestic economy or the global economy as a whole.
One of the most foundational ideas of international trade is that it is often cheaper to obtain certain goods and services from abroad than it is to get the same goods and services domestically. This is based on a diverse range of factors, including available resources, government regulations, and manufacturing infrastructures. International trade provides an important focus for global economic analysis, as understanding the forces that motivate various countries to engage in international trade can provide substantial insight into the behavior of the global economy. Global economic analysis often involves developing a detailed comprehension of the costs and benefits of engaging in trade on a global level.
Many economists who engage in global economic analysis, particularly those in academia who do not have an institutional bias, believe that the goal of globalization should be equalizing global wages and prices. Such economists often use global economic analysis as a tool to determine which economic policies could lead to this goal. Others use analysis to help themselves or their businesses. The ability to predict market changes with any degree of accuracy can be a great help in business and in profiting from the stock market.
There are many particular dynamics that economists study when engaging in global economic analysis. Gross domestic product, or GDP, is the final value of goods and services produced in a given region over a period of time and is one of the most important dynamics for global economic analysis. It can be used to determine, with some accuracy, a nation's overall performance in the global economy. GDP per capita is a measurement often used to estimate a region's standard of living. Inflation, income, and average unemployment are also important factors in economic analysis.
