Impact of Economic Changes on Managers

A drastic change in the economic situation on a worldwide basis has created an impact on various business sectors around the countries. The boom in the economy may result in growth and benefit in business and slump down of economy may lead to a loss in business. When the economic situation is favorable, i.e. in low interest rate and in rising demand, there is a huge growth in economy (The Times 100, 2011).There were two current issues of economic crisis: one was financial crises and the other was related to production and employment. The financial crisis emerged from the US and it had an impact on almost all of the developed nations. The government performed the fiscal stimulus package to fill the gap of demand slowdown of the public sector (Wray, 2009).Lehman Brothers Investment Bank had led to a huge loss of several billions of dollars in the mortgage market of the US. The stock market of the US fell down due to the collapse of Lehman Brothers and the banking shares were hardest hit. The failure of Lehman Brothers had adversely affected the stability of the global financial system (BBC, 2008).The policymakers are failing to address the structural reforms as well as regulatory changes which are essential in order to make certain that a repeat of the crisis does not take place and international policy coordination is proving to be insufficient to the task. German, French along with British banks hold the debt of the bordering countries. By the end of 2011, it is predicted that there will be a European banking crisis due to sovereign debt defaults (Carnegei Endowment, 2010).The economy along with the financial crisis will be affecting the global business time-to-time. The US has been under the threat of pressure of economic downturn. The growth of the country has turned out to be negative again from the end of 2010. The unemployment rate is also rising as 2 million American workers were laid off.