Most economists would agree that due to the credit crunch, global markets are facing potential collapse (Stiglitz, 2008; Monbiot, 2007). As we know, our current recession began in the USA where banks got into the habit of granting mortgages to lenders unable to pay them back. This created a liquidity crisis in the country which banks and government were unable to resolve, and soon these economic difficulties spread to the rest of the world (BBC News, 2008).

Therefore this crisis causes the interest rates on mortgages have rocketed, so the prices of every thing will be increased.


In this essay, I will argue that we have to radically assess the 20th Century philosophy of free trade and globalisation due to the failures we've experienced recently in global markets. I will begin by looking at how this philosophy was based on an erroneous logic and then go on to describe the ways in which it has set us back with regard to financial efficiency and growth. I will then go on to discuss the ways in which I think this current crisis will affect future research in my subject area International Banking and Finance.


Today my self study was academic vocabulary:

I found the academic vocabulary in the English Langue learning section on the first floor of the library, and I found some vocabulary related to my subject, such as,
Global trade: International business
Short-selling: dealers borrow stock they hope will drop in value
Underprivileged countries: developing countries
Loan: a person or company who gives money to other person
Credit crunch: meaning a severe shortage of money or credit