The essay should apply economic analysis to a real world situation or

The should apply economic analysis to a real world situation or issue - Essay Example Nonetheless, irrespective of the diverse challenges facing the global economy presently, continental Europe poses the biggest threats to the growth of the world economy (Economist, 2014). Presently Germany is witnessing a fall in terms of growth. Based on the contribution that Germany makes to the Eurozone, this means that the euro area will head towards its third recession in a period of six years. Irrespective of the efforts that the leaders of the Eurozone have made to boost the growth of the region and save the dominant currency, they have ended up wasting two years without any progress (EurActiv, 2015). Italians and the French have for instance embarked on introducing structural reforms while Germans have supposed strictness of operations, and these efforts have not been effective in boosting growth in the region. In the European region, more than eight countries are witnessing falling prices. The overall rate of inflation has gone down considerably to about 0.3 percent, and will deteriorate further in the coming years. The Eurozone comprises of about one-fifth of the global output. Thus, with the rate at which the region is witnessing deflation and stagnation, it is likely that this effect will prevail in different parts of the world, leading to global stagnation in the coming years (Los Angeles Times, 2015). Despite the effect being felt in Europe, several optimists both outside and inside Europe refer to the example of Japan. During the late 1990s, Japan witnessed a major deflation, which has unpleasant effects. This deflation did not have the major influence on the country or the world. However, based on the events taking place in the Eurozone, it is apparent that more dangers will emerge. Unlike in the case of Japan, the case of the Eurozone is not secluded. From America to China, the rate of inflation is considerably low and falling. Unlike Japan’s case, whose society is