What Is a Macro Risk?

Macroeconomic risk refers to the loss of corporate profits that may result from fluctuations in economic activity and price levels.

Macroeconomic risk

Right!

Macroeconomic risk refers to the loss of corporate profits that may result from fluctuations in economic activity and price levels.

Chinese name

Macroeconomic risk

Foreign name

Macro economic risk

nickname

Economic activity and price fluctuations may cause corporate profit loss

Applied discipline

economic

Macroeconomic risks are potential, hidden and cumulative. The so-called potentiality of macroeconomic risks refers to the fact that macroeconomic risks are always accompanied by the macroeconomic system. Macroeconomic development and operation itself imply economic risks. The concealment of macroeconomic risks refers to the fact that although macroeconomic risks are always potential, in most cases it is hidden inside the economic system and will not be manifested. It will be exposed only after a certain period of time. . The cumulative nature of macroeconomic risks refers to the fact that macroeconomic risks will increase with the deepening of social and economic contradictions. When accumulated to a certain degree, an economic crisis will be triggered. The potential, hidden and cumulative nature of macroeconomic risks and the characteristics of analysis of international capital flows and macroeconomic operations. One-sidedness is also induced to a certain extent, indicating that macroeconomic risks are always affected by the formation and change trends and predictions of risks, and are being opened Under economic conditions, macroeconomic risks are largely caused by international capital flows. Therefore, it is necessary to analyze macroeconomic risks from the perspective of international capital flows. This section first analyzes the macroeconomic risks in international capital flows, and then further analyzes exchange rate risks and interest rate risks in international capital flows. ^[1]

1. From a domestic perspective, the main determinants include: ^[1]

The causes of macroeconomic risks are complex and multiple. Under normal circumstances, a single factor cannot cause economic fluctuations and economic system turbulence, and only a combination of factors can cause economic fluctuations and economic system turbulence. Of course, under different economic conditions, the effects of various factors on macroeconomic risks are different. In some cases, certain factors dominate and determine. In other cases, other factors dominate and determine. ^[1]

In addition, with the development of the economy, the types and structures of factors that cause macroeconomic risks are also changing, which will lead to the emergence of new economic problems. The formation and development of macroeconomic risks are determined by the economic development itself. In the case of a low level of economic development, generally speaking, the risk of macroeconomics is relatively small, because the economy is small at this time, the degree of commercialization and marketization of the economy is not high, and the degree of economic planning is relatively high The government's intervention and management of the economy is also relatively large, so the risks to the macro economy are limited (at least during the time period).

More importantly, generally, the level of economic development is low, and the degree of economic openness is also low. Therefore, the impact of international economic factors on the economy is small, which reduces the macroeconomic risks to a certain extent. However, with a relatively high level of economic development, the degree of commercialization, marketization, openness, and internationalization of the economy is generally high. At this time, both internal and external interference factors of the economic system are relatively increased. Therefore, the possible macroeconomic risks are relatively large. Especially with the acceleration of economic globalization and the development of world economic integration, while the economies of various countries have gained new development opportunities, the degree of macroeconomic risks has also increased relatively. One of the reasons for the continuous outbreak of the international financial crisis in the 1990s An illustration.

Of course, the level of economic development itself is not necessarily related to macroeconomic risks, but under normal circumstances, because the level of economic development and the corresponding changes in systems, structures, and management technologies are often asymmetric, only macroeconomics The generation of risk. In fact, in economically developed countries, because the economic system, market structure, microeconomic operating mechanisms, and macroeconomic control mechanisms are more developed and can operate in an organic and coordinated manner, economic quality, economic quality, and economic efficiency are also relatively high. Economic risks have instead been reduced.