Essay Example on US Financial Markets: Size, Value & Trading Volumes

Introduction

The United States tend to possess their counterparts in different foreign nations. The United States financial markets are more significant in size, value, and trading volumes than the foreign markets. The growth of the foreign financial markets resulted due to various factors such as the international investors shifted to the United States and different markets, thus expanding their investment portfolio return characteristics and risks. Besides, between 1992 and 2010, the foreign investors' present on the United States had financial market debts, which increased by 700% while the international markets' financial market arrear securities possessed by the United States investors rose by 560 percent (Borjas, 2015). Since the United States dominates the global market, it is evident that they depend on the development and growth of different economies. Currently, due to globalization of institutions and foreign markets, the United States financial markets have a more significant impact than historically. For example, in 2007, the global markets encountered significant selloffs due to an increasing concern among the investors that the issues experienced in the United States market triggered reduced global economic growth (Dustmann & Frattini, 2013). The decline in the United States bond markets brought fear to South Korea, China, and Mexico economies. Therefore, the United States financial institutions have to compete with both the domestic and foreign institutions to maintain their growth and development.

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Research that Demonstrates the Validity and Applicability of the Problem, Question or Issue in the Field

Since the United States depends on the foreign and domestic institutions for their growth and development, immigration led to more cheap labor in the United States fields, thus resulting in economic growth. Also, migration led to a reduction in the cost of importing and exporting goods and services to and from the United States by enabling domestic companies to bypass institutional and cultural obstacles in other markets (Sherman, Trisi, Stone, Gonzales& Parrots, 2019). Also, when selling legal services abroad will require the United States firms to have comprehensive knowledge of the foreign countries' legal system.

The solution to the Issue or Problem

The United States can team with other nations and set policies that guide on immigration as it affects the development of various States. Also, controlling immigration will lead to an improvement in wages paid to workers as they possess the appropriate skills related to their profession. Through regulated immigrants into the United States, productivity gain can lead to specialization outcome where immigrants have an added advantage in doing specific productivity jobs, enabling a higher division of labor within united state companies (Gubernskaya & Dreby, 2017). Therefore, the use of these regulations and policies will promote the growth of the United States and its financial markets.

Quantitative Data Specific and Relevant to the Problem, Question, or Issue

The world market has experienced several swings in the market value as investors focus on sorting out the issue of the financial market. The markets obtained from Europe and Russia suspended trading due to the rise in stock prices (Ganguli, 2015). The financial market instruments experienced losses from illiquidity in the markets. In 2008, the net income reduced significantly, thus affecting the growth of the United States. Also, the presence of immigrants in the United States affected trade among different States and the acquisition of products and services from other countries.

Narrative Analysis Supported (Cited) by the Research on the Topic

Labor Market Competition

Although the immigrants raise the supply of labor in the U.S. market, they use their salaries on food, transport, televisions, and other goods and services hence expanding the American economy demand (Ruhs & Vargas-Silva, 2015). The increase in demand results in more jobs to produces and sell products and services. Standard economy theory indicates that while the high supply of labor from immigration may initially reduce wages, overtime companies can increase investments to bring back the total amount of capital per worker, which in turn brings back wages (Caliendo, Parro, Rossi-Hansberg & Sarte, 2018). Therefore, the most significant effect of immigration in the U.S. has been the supply of employees without high school certificates and workers with college degrees.

Fiscal Impact

Undocumented and documented immigrants will always result in a positive contribution to the economy of the country. The budgetary impact differs broadly at the local levels and state and is dependent on the characteristics of the immigrants in terms of skill levels, education, and ages. Although the taxes from immigrants help in defense spending, they don't produce any additional costs for the military, thus decreasing the federal tax load of American natives (Lee, 2017). Many immigrants are also less skilled, and therefore, their income is lower than those from locals. Thus, this results in immigration paying less to local, state, and federal taxes, and they mostly use federal- funded privilege programs such as SNAP, Medicare, and other welfares at a higher rate than locals.

Conclusion

The financial markets are various structures in which funds flow, and they are differentiated along with money versus capital markets and primary versus secondary markets. In primary markets, the users of multiple funds tend to raise finances through the foreign concerns of financial instruments such as bonds and stocks. Immigration has affected the financial markets, thus delaying the growth and development of the United States. Therefore, through immigration productivity, financial markets and the labor market competition has been impacted both positively and negatively.

References

Borjas, G. J. (2015). Immigration and globalization: A review essay. Journal of Economic Literature, 53(4), 961-74. Retrieved from https://www.aeaweb.org/articles?id=10.1257/jel.53.4.961

Caliendo, L., Parro, F., Rossi-Hansberg, E., & Sarte, P. D. (2018). The impact of regional and sectoral productivity changes on the U.S. economy. The Review of economic studies, 85(4), 2042-2096. Retrieved from https://academic.oup.com/restud/article-abstract/85/4/2042/4774710Dustmann, C., & Frattini, T. &. (2013). The effect of immigration, along with the distribution of wages. Review of Economic Studies, 80 (1), 145-173. Retrieved from https://ideas.repec.org/a/oup/restud/v80y2013i1p145-173.html

Ganguli, I. (2015). Immigration and ideas: What did Russian scientists "bring" to the United States?. Journal of Labor Economics, 33(S1), S257-S288. Retrieved from https://www.journals.uchicago.edu/doi/abs/10.1086/679741

Gubernskaya, Z., & Dreby, J. (2017). U.S. immigration policy and the case for family unity. Journal on Migration and Human Security, 5(2), 417-430. Retrieved from https://journals.sagepub.com/doi/abs/10.1177/233150241700500210

Lee, R. (2017). The economic and fiscal consequences of immigration. Washington: The National Academies Press.Retrieved from https://www.jstor.org/stable/44202635

Ruhs, M., & Vargas-Silva, C. (2015). The labor market effects of immigration. The Migration Observatory. Retrieved from http://migrationobservatory.ox.ac.uk/wp-content/uploads/2016/04/Briefing-Labour_Market_Effects_Immigration.pdf

Sherman, A., Trisi, D., Stone, C., Gonzales, S., & Parrots, S. (2019). Immigrants Contribute Greatly to U.S. Economy, Despite Administration's "Public Charge" Rule Rationale. Retrieved from https://www.cbpp.org/research/poverty-and-inequality/immigrants-contribute-greatly-to-us-economy-despite-administrations