| Since the dawn of the 21st century very few nations | | | | globe envision, India and China should rule the world in |
| have been recognized or emerged to have the | | | | the 21st century. Its been over a century since the |
| largest economic stability in the world. Leading nations | | | | United States has been the largest economy in the |
| like the United States entered the 21st century with | | | | world but major developments have taken place in |
| an economy that was bigger, and by all means more | | | | the world economy since then, leading to the shift of |
| successful, than ever. Despite enduring two world | | | | focus from the US and the rich countries of Europe |
| wars and an everlasting depression in the first half of | | | | to the two Asian giants India and China. |
| the 20th century, it faced challenges which ranged | | | | With the arrival of the 21st century, there has been |
| from a 40-year Cold War with the Soviet Union to | | | | a dramatic shift in India's approach to external sector |
| the existence of sharp inflation, huge unemployment, | | | | management in accordance to the changing situations. |
| and enormous government budget deficits in the | | | | With the materialization of marginal current account |
| second half of the century. Finally this great nation | | | | surplus, the sustainability of India's current account |
| had the opportunity to relish a period of economic | | | | deficit may not be a problem though the deficit on |
| calm in the 1990s. Prices on goods were steady, | | | | her trade account persists and has been increasing. |
| unemployment dropped significantly, the government | | | | The main providers to the positive outcome in India's |
| posted a budget surplus, and the stock market | | | | current account are workers' remittances and export |
| experienced an unprecedented boom. | | | | of software, both being a result of process of global |
| The United States however has been undergoing | | | | integration. The exchange rate system as well as |
| philosophical economic change right at the start of | | | | external debt management has served India well. The |
| the 21st century. They witnessed a wave of | | | | new policy regime assisted India to withstand several |
| technological innovations in telecommunications, | | | | global crises while maintaining a respectable growth. It |
| computing, and other biological sciences, which | | | | has become obvious that the management of the |
| profoundly affected Americans work and play. At the | | | | external sector is closely linked to the domestic |
| same time, the growing economic strength of | | | | sector and the major thrust of Indian public policy is |
| Western Europe and the emergence of powerful | | | | now on managing the integration. |
| economies in Asia and the increased global integration | | | | Further, the simultaneous emergence of China and |
| of business and finance posed new opportunities as | | | | India with significant competitive strengths in trade in |
| well as risks. All of these rapid changes resulted or | | | | goods as well as services will have to be |
| lead to the Americans in re-examining everything | | | | accommodated by the global economy. Thus, the |
| from how they manage their workplaces to the role | | | | future for both these nations seems to be bright as |
| of government. Perhaps this is the reason why many | | | | they struggle to correct current global imbalances. In |
| workers, while contented with their current status, | | | | brief, India has moved from managing external sector |
| looked to the future with uncertainty. | | | | to implementing an optimal integration of domestic |
| Moving to the third world, according to economics | | | | and external sectors, thus providing itself a better |
| experts and various studies as conducted across the | | | | position when it comes to global economy. |