To my knowledge, I donot see this phase as a 'bubble burst'. There was 'sequential' growth for the last few years, but now the growth rate is low.This is because the unavailability of funds (cheap money, which banks borrow at low interest rates for business) in the market. As financial institutions are the growth drivers to the economy, cash crunch led to the cascading effect of this situation which started domestically in US has proliferated as a global factor, as we term it as recession. And also recession is good for any growing economy also it is not unusual.
A growing economy should have a recession once in 6 - 7 years as it corrects prices and bring equality in socio- economical factors. All macro economic variables are complimentary to each other for a balanced growth.As most of the countries globally, depend on American market for earnings. indian economy is based on savings. American economy is based on consumption. when spending becomes less in US, we lose earning, as a result savings gets affected and we became too cautious, resulting in cost cutting measures.
As this recession, is due to the collapse of financial institutions, all stimulus packages and federal reserve measures will take time to effect the economy. It may take 1 - 2 years, then i hope the growth will revive.
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