Economic Leadership
In this essay, we attempt to find out the relationship between a current financial circumstance and its financial development. To be more specific, we will discuss several stories from those well-developed countries and consider how those countries’ domestic market development impact the development of globalization. We will concern what experiences we could learn from those countries and how these experiences affect us to establish a viable financial system. The following content will force on the components of indicate an efficient financial system and the other body of discussion will concern the places where the good financial system are appeared. Based on modern economic history, we choose countries that their financial system grew rapidly and early in their historical record. The United States is an excellent sample in our study and more detail will be provided on Japan and Great Britain which these two countries are respectively represents Asia and Europe market histories.
According to the reading materials by Rousseau and Sylla, the study papers suggest that a well-functioning financial system will appear under five key conditions. These conditions could be shortly concluded as public finance, stable money supply, banks and banking system as well as central banks and securities markets as the last condition.
Public finance and stable monetary source are the two most significant conditions among those components. It is appeared in history that financial system emerged will expand the marker supply which is caused the unbalance between supply and demand. As the unbalance become larger, the nation has to display a new approach in controlling expenditure, and namely the sign of capital accumulation. The public spend their money as an investors to government, and as consequence, government use this money to raise funds and makes the financial market work better. The stable source of funding also is essential to establish the financial system, and