This is an essay on MSc International Finance Example | Topics and Well Written Essays - 1500 words

This is an on MSc International Finance - Essay Example If these two concepts are to be mingled, then it may end up as the wrong medicine for a disease and lead to misjudgment and misallocation of resources. IMS does not promise any corrective measure addressed towards the increasing global imbalance. For the past few years the strength of the dollar is declining against the floating currencies of Europe (more specifically against euro and pound) and that of the Anglo Saxon world. However this will lead to the leveling of the current account deficit of USA. It also ensures that US fiscal deficit has to be adjusted immediately resulting in a wide leap in tax rate and finally a 25 percent revaluation of US $. The Europeans are in need for structural reform to liberalize the sclerotic European labor markets. However, neither US nor the European nations are adopting any corrective measures, making the current order as unsustainable. If this continues, the central bank of the Asian countries refuses to accumulate more dollars then in no time it will lead to a global recession. A viable IMS has to mend this type of disaster.