The global economy is incredibly complex and involves the conditions and activities taking place in an array of key marketplaces, as well as the policies instituted by governing bodies across the globe. All different types of factors can have an impact on the economy, which in turn can cause disruptions for businesses and market sectors. This continual cause-and-effect nature also creates new impacts and ensures that the economy is an ever-changing concept that must be studied and understood on an ongoing basis.
The global economy has incredibly far-reaching effects, depending on current and emerging legislation and market forecasts, and can impact business administration across sectors like accounting and finance, information systems, marketing, supply chain management and more. One of the foundational courses in the University of Maryland’s Robert H. Smith School of Business Online Master of Business Administration delves deeper into global economic environmental conditions, including skills related to macroeconomics, making market forecasts and supporting policy recommendations. Today, we’ll take a closer look at this course, its related concepts and skills students can bolster through their Smith Online MBA studies.
The global economy and macroeconomics
One element that makes the conditions of the global economy so sophisticated and complex is the fact that many different factors can create changes in this environment. What’s more, the economy can have deep effects on businesses operating in different market sectors, and the policies created by governing bodies can disrupt company activities, thereby shifting economic conditions.
As the Institute for New Economic Thinking points out, governments and those that create economic standards and guidelines leverage macroeconomic theory concepts to support the creation of these policies. For these reasons, it’s imperative for those studying business administration to understand macroeconomics and the process for creating policies that will influence the global economy.
Some major macroeconomic theories to be aware of include:
- The Keynesian Theory, which, according to Boundless Economics, states that, despite traditional views on supply and demand, there will be situations in which aggregate demand does not rise to the level of supply.
- The Monetarism Theory, which centers around the role of central banking and the overall supply of monetary resources in the current economy, and how changes in these areas will impact the economic system.
- The Austrian Theory, which focuses on methodological individualism, and suggests that consumers will take certain actions which can then be analyzed and applied to decisions on policy and market forecasts.
Macroeconomics plays a considerable role in understanding the state of the global economic environment and can help pinpoint conditions which might help identify upcoming changes in this environment.
The impact of economic forecasts
The global economic environment can also be affected by emerging forecasts, which attempt to accurately map the future of a certain market or the economy as a whole. As Investopedia explains, economic forecasting involves several critical factors and indicators to support effective and actionable predictions.
“Economic forecasting typically tries to come up with a future gross domestic product (GDP) growth rate, involving the building of statistical models with inputs of several key variables,” Investopedia states.
Some of these indicators include elements like current inflation rates, interest rates, production levels in industrial sectors, consumer confidence and purchasing, worker productivity, retail sales and current unemployment rates. However, more in-depth economic forecasts, particularly those that look at the global environment as opposed to a certain region, will likely include a number of other factors and considerations to support accuracy.
The Global Economic Environment course in the Online MBA program
As part of their foundational studies, students in the Smith Online Master of Business Administration program will take part in the two-credit Global Economic Environment course.
In this class, students will achieve key learning outcomes related to the current economic environment, including:
- Understanding and interpreting the ever-changing conditions of the national and international economic environment
- Leveraging the necessary tools to support understanding of economic environment conditions
- Exploring the potential effects of policies on the economy and businesses
- Developing a basic understanding of macroeconomic concepts and how these are used to support the creation of policies
- Interpreting and understanding market economic forecasts, including the factors or indicators used to support these predictions
- Evaluating policy recommendations and the potential impacts
- Exploring course concepts like macroeconomic theory, economic forecasting and economic policy recommendations through a series of case studies
Students will also learn the relationship that exists between individual and national environments and how it ties into the overarching global economy. Those enrolled will study the individual factors that can impact economic forecasts and policy recommendations, encompassing elements like fiscal and monetary considerations, trade and tax levels, output and exchange rates and more.
The skills gleaned from this class can be applied to a number of different business administration career paths and will help students understand the complex factors that impact the global economy, how to think critically and interpret these elements, and how to apply this information to management in different organizations.
To find out more about what you can learn from the Online Master of Business Administration curriculum at Maryland Smith, connect with one of our expert enrollment advisors today.