The general term of advanced and emerging economies mainly refers to the economic stages of development of a country and corresponds to the average standard of living of the country's residents, while advanced economies are generally the economies of Western Europe and the United States, the Advanced Capitalist Countries (ACC) as opposed to the emerging market economies (EMEs) which generally come from elsewhere, including the BRIC countries of Brazil, Russia, India and China. Over the past two decades, EMEs have become a dominant presence in the global economy. Today they represent a substantial share of global production and, with their rapid growth rates, have become a major driver of global growth over the past decade. Trade and financial links between advanced economies and EMEs have also become much stronger, accelerating the process of global integration. The replacement of the United States by these EMEs as engines of economic growth has raised questions about the relevance of the cliché that when the US economy sneezes, the rest of the world catches a cold. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Sustainability is a key metric especially considering the propensity for debt-driven excessive leverage growth in Asia, as seen with the Asian financial crisis and subsequently in some cases the 2009 global financial crisis. Sustainable growth refers to a growth model that is not risky or prone to external shocks and that is both broad and long-term. An example of this would be the growth model pursued by the newly industrialized countries of Taiwan, South Korea and Singapore. These countries followed a 4-step path to sustainable economic growth, first creating import-substituting industrialization, then moving to export-oriented industrialization (EOI), and finally deregulation and diversification. (Kim, Jong-Il & Lau, Lawrence, 1994) The global financial crisis has changed the perception of this universally applicable model and casts a shadow on the ability of EMEs to insulate themselves from shocks in advanced countries, especially considering the exports which required a growing consumer base for products manufactured in the country as a decline in economic growth would result in a shrinking market for such goods and impede the growth of infant industries in EMEs. It is important to allow nascent industries to grow as it would be critical for such industries to not only pursue internal economies of scale, but also develop industry-specific technological and marketing expertise and acquire a brand as a reliable source of such goods. For example, the period between the 1960s and 1980s saw a continued upward trend in growth among ACCs, and this period of growth was essential to Taiwan's growth in its EOI phase and the development of the brand of Taiwan as a reliable source of semiconductors and electronics. However, the 2009 global financial crisis forced economists around the world to consider how intricate the interconnections were between the economies of EMEs and ACCs. After all, problems in advanced countries' financial systems quickly spread to several EMEs during the last quarter of 2008 and the first half of 2009, disrupting their financial markets and hampering near-term growth prospects. While these countries have not experienced the banking crisis experienced by ACC countries, it should be noted that many countries have seen theirsexports decline by 50% or more and this situation has led many countries, including Asian NICs, to have negative growth rates in 2009 and 2010. As the global financial crisis has clearly demonstrated once again, financial and goods markets around the world are closely linked to each other, and shocks in one part of the global financial system can, and often do, have large and immediate effects on other parts. Furthermore, the crisis was a bitter reminder that, for all their benefits, deeper trade and financial linkages can serve as a mechanism to amplify shocks and intensify their effects on the real side of the economy. Raising the question of whether EMEs should actually pursue such trade ties with ACC countries. However, we must understand that in the current globalization of the financial and goods markets it is essential that emerging countries perform well and that a global crisis like the one in 2009 does not occur, which would also significantly affect emerging economies. As a significant portion of emerging economies followed advanced countries into recession, the crisis challenged the idea of ​​greater resilience of EMEs to shocks from advanced countries. This was not an entirely surprising result since past episodes of boom-and-bust economic cycles, such as the 1997 financial crisis and the 2001 dot-com bubble, suggest that deep, highly synchronized recessions in advanced countries tend to have much broader impacts on EMEs. . However, it should also be noted that, since mid-2009, a number of EMEs, including Singapore, have recovered rapidly from the global recession and, as a group, EMEs have weathered the crisis much better than advanced economies which have seen raised to single digits. and in some cases double-digit growth rates in 2010 and 2011. Therefore, there is obviously significant variation in the degree of resilience shown by different groups of emerging markets. For example, Asian emerging markets, particularly China and India, have done much better than emerging European economies. However, EME fundamentals suggest that most of these countries have the potential to generate high and sustained growth over the long term. and the shift in focus of global growth from advanced to emerging economies is likely to continue. Furthermore, it should be noted that in the current situation, salaries and personal incomes of Asian families, while growing rapidly, are still generally depressed and unable to support a significant part of market production and therefore domestic demand is not sufficient to support economic growth or production in most EMEs. On the other hand, however, in the near medium to medium future, as we see signs of the thriving middle and upper middle class in China and India, these markets will become a huge market for goods and companies in these countries will be able to move from simple EOI to also being able to rely on domestic demand for goods as well-being increases in these countries. In light of these developments, a deeper analysis of the implications of changes in the global economic structure is needed. Does economic theory provide clear indications on the effects of ACC growth on EMEs? Indeed, different classes of theoretical models have highlighted two opposing effects of the growing trade integration we have witnessed in recent decades. Increasing trade interdependence should result in derivative demand for other products within the same area, increasing the interconnectedness of the group. For example, when commercial zones are liberalized, thecompanies and multinationals can separate parts of their businesses and locate them in areas with a particular comparative advantage. This would mean that the entire region would now suffer if the multinational one suffered as many businesses would rely on such multinationals to buy their products and this would mean that the peaks and troughs of the business cycle would have to be more synchronized. On the other hand, if growing trade links lead to greater specialization of production, then a country's production may not depend so much on one firm but on an entire sector and thus comparative advantage may allow countries to decouple their production from another. company and diversify demand. (Copeland,2012) Economists similarly theorize the contrasting effects of financial integration on a group such as the EU free trade area or any international community. On the one hand, if an area's financial system is affected, the exposure that other areas might have to it, as in the European community between BNP Paribas and Deutsche Bank and other European banks, could amplify the dampening of potential cross-border economic growth and a restriction on lending as bad loans could potentially create a spiral of margin calls for these banks leading to a full-blown financial crisis. On the other hand, however, this effect could potentially be offset by greater industrial specialization, so if countries can use financial markets and monetary and fiscal policy to level consumption through interest rate cuts to keep businesses in able to repay their loans allowing them to focus on their comparative advantage and helping those industries. In short, the overall net effect of interconnectedness between EME and ACC, as well as within these communities, is undetermined. However, what might help us understand this better is that the level of development also plays a role in determining the nature of the relationship between these countries. groups. For example, trade and financial integration could help underdeveloped low-income economies diversify their production base since financial and goods market integration gives them access to foreign financing for investment projects as well as access to larger foreign markets . This would obviously allow underdeveloped low-income economies to gain substantial economies of scale by supplying to these richer countries, and the greater wealth in these countries would perhaps also allow EME companies to charge higher prices while increasing revenues and profit margins. This, however, depends on the domestic demand of these ACC countries and a decline in the RNY of these countries could indeed lead to a decline in the production of these EME companies. Likewise, opening up financial markets would be a key move as, as stated earlier, this would allow capital flows and short-term investments and foreign direct investments to flow into the country and improve the SOL in the country. China is not really applicable for this purpose, considering the much more state-owned nature of businesses in that country, we should look at India. India opened its financial markets and companies to foreign investors in the late 1990s. The result was that India became the No. 1 destination for U.S. foreign direct investment and created more than 10 million jobs. However, we must also consider that during the dot.com bubble and the financial crisis of 2009, the Indian economy was much more affected than the dominant markets of Chinese companies or other state-owned or.