ABSTRACT
This chapter maps the size of the financial economy in relation to the real economy. It analyzes the interdependency between the two sides of the global market economy—the financial economy versus the real economy using the model of an open economy with the standard gross domestic product (GDP), the human development index (HDI), and the income inequality (GINI) indices, which can be used to classify many countries of the world into groups such as regional blocks. The chapter then examines the Eurozone crisis, looking at both financial crisis (debt, deficits) and real economy depression (unemployment). One may also relate income distribution to a measure of the overall quality of life in the countries of the world, which corresponds to the UN HDI. The economies of the countries of the world are interwoven more and more through trade and foreign direct investments (FDIs). Typical of accelerated globalization is the spread of the multinational firms (MNFs) and the transnational corporations (TNCs).
