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Financial globalization and the capital market

The impact of the financial crisis on the Tunisian financial market The patterns of cross-border capital raised the effect on the developments of domestic markets and highlighted the differences between advanced and developing economies. One of the effects of this globalization is the introduction of the euro and the effect it had on the European and global capital markets by bringing into existence a currency area comparable in size to that of the United States. However, the globalization had also a downside resulted by the effects of the financial crises on foreign capital raisings during the 2007-09 global financial crisis. Financial globalization expanded the international capital markets to investors and firms all over the world. Foreign capital raisings by firms have increased substantially since the early 1990s in terms of equity as well as debt. The integration of financial markets has emphasized the rapid flow of capital across borders as well as magnifying
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MEASURING THE COST OF LIVING

Introduction Few years after the independence of Tunisia, the income per capita was around 50 TD. Today, it is well over 5000 TD. To compare the two figures, we need to find some way of turning dollar figures into meaningful measures of purchasing power . That is exactly the job of a statistic called the consumer price index (CPI) . The CPI is used to monitor changes in the cost of living over time. When the CPI rises, the typical family has to spend more to maintain the same standard of living. Inflation describes a situation in which the economy’s overall price level is rising.   Economists measure the inflation rate by the consumer price index. THE CONSUMER PRICE INDEX The CPI is a measure of the overall cost of the goods and services bought by a typical consumer. The first step in computing the CPI is to determine which prices are most important to the typical consumer. If the typical consumer buys more of good A than good B,  then the price of  A 
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MEASURING A NATION'S INCOME

MEASURING  A  NATION'S INCOME Monitoring the performance of the overall economy: Microeconomics:  The study of how households and firms make decisions and how they interact in markets. Macroeconomics:  The study of economy-wide phenomena, including inflation,  unemployment, and economic growth. Because the condition of the overall economy profoundly affects all of us, changes in economic conditions are widely reported by the media. The statistics might measure: ·         the total income of everyone in the economy  ( GDP ), ·         the rate at which average prices are rising (i nflation ), ·         the percentage of the labor force that is out of work ( unemployment), total spending at stores (retail sales) or the trade deficit . THE ECONOMY’S INCOME AND EXPENDITURE When judging whether the economy is doing well or poorly, it is natural to look at the total income that everyone in the economy is earning. That is the task of gross dom
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THINKING LIKE AN ECONOMIST

THINKING LIKE AN ECONOMIST THE SCIENTIFIC METHOD: OBSERVATION, THEORY, AND MORE OBSERVATION: The interplay between theory and observation occurs in the field of economics. For example: Theory of inflation: Rapid increases in prices. Observation: High inflation arises when the government prints too much money.     To test this theory, the economists collect and analyze data on prices and money from many different countries. THE ROLE OF ASSUMPTIONS Assumptions can make the world easier to understand. To study the effects of international trade, we may assume that the world consists of only two countries and that each country produces only two goods. The art in scientific thinking is deciding which assumptions to make economic models. ECONOMIC MODELS Economic models omit many details to focus on what is truly important. Economists assume away many of the details of the economy that are irrelevant for studying the question at hand. Ø Al
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TEN PRINCIPLES OF ECONOMICS

TEN PRINCIPLES OF ECONOMICS PRINCIPLE #1: PEOPLE FACE TRADEOFFS Economics is the study of how society manages its scarce resources. To get one thing that we like, we usually have to give up another thing that we like. The student must decide how to allocate his time. For every hour he studies one subject, he gives up an hour he could have used studying the other.  Parents must decide how to spend their family income. They can buy food, clothing, or a family vacation. When they choose to spend an extra dinar on one of these goods, they have one less dinar to spend on some other good. PRINCIPLE #2: THE COST OF SOMETHING IS WHAT YOU GIVE UP TO GET IT Because people face tradeoffs, making decisions requires comparing the costs and benefits of alternative courses of action. For example, Decision to go to university: ·          Costs may include additional expenses on room and board, transportation and most of all time. ·          Benefits – better job oppo
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