Professional Documents
Culture Documents
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Virender Singh
PGDM
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EFFECTS OF RECESSION
The United States was heading toward recession. This is
no longer conjecture -- the threat is real. This was
indirectly acknowledged by the White House on Jan.18
with the unveiling of an economic aid package that
practically confirmed everyone's worst fears.
The signs have been apparent since last June or July. The stock
market has been moving sideways rather than up. There were
signals that the economy, which had been hopping from one
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Bottom of Form
It all started at the beginning of the US economic boom in
1998, when large numbers of people decided that real estate,
which still hadn’t recovered from the early 1990s slump, had
become a bargain. At the same time, Wall Street was making it
easier for buyers to get loans. It was transforming the
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What is the other side of the coin? Frankly it’s an overall loss to
everyone. But this is the right time for govt. to attract good
talent to join in govt.organizations. That way government can
increase its efficiency and also help country to face this
situation. But government has to act quickly for filling already
vacant positions and creating new jobs.
INDIA
It’s almost a decade since we entered into the 2000s. Economic
growth in these years wasn’t so impressive for the western
economies. It proves to be one of the worst economic periods
for those economies. Indeed, the so-called fastest growing
economies (such as India, Brazil, China, Mexico, Russia, and
Indonesia) have seen an unprecedented economic expansion
because, the eastern economies were the producers and the
western economies were the consumer and the same trend
would likely to continue as the companies, nowadays, are more
conscious about the cost. Rising input cost (or raw material)
are forcing the corporations in the industrialized economies to
shift their focus on the cost-effective region to keep up the
pricing competitiveness in the specific industry, they are in.
Change in consumer trend is also major concern for the
companies to invest more in the process of innovation,
research and development (R&D).
As the economic pace is picking up, global commodity prices
have staged a comeback from lows and global trade has also
seen a decent growth over the last two years. Unprecedented
Government intervention and exceptionally large interest rate
cuts by the central bank in advanced and emerging economies
have contributed a lot to pull the global economy up from the
deepest recession since the World War II. Several
Governments around the world launched the stimulus packages
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Inflation Direction -
Since the global economies are emerging from the lows, in a
short run, inflation is expected to rise due to bounce back in
demand for commodities. Although, the underlying inflation are
still on the downside. Higher unemployment rate in the west
will lead to low wage growth and pricing power would be
limited for a long time as demand will be very vulnerable to
price rises. But, India would buck the trend in inflation due to
ample amount of liquidity in the system and rising demand.
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in Rs. Crores % of
Q3 2008 Q3 2009
(10 Million) GDP
Public Debt
and 2)
1. External
237,351.77 294,941.67
Debt
2. Internal
1,861,934.462,210,509.07
Debt
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China
China's economy is huge and expanding rapidly. In the last 30
years the rate of Chinese economic growth has been almost
miraculous, averaging 8% growth in Gross Domestic Product
(GDP) per annum. The economy has grown more than 10 times
during that period, with Chinese GDP reaching 3.42 trillion US
dollars by 2007. In Purchasing Power Parity GDP, China already
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has the biggest economy after the United States. Most analysts
project China to become the largest economy in the world this
century using all measures of GDP. However, there are still
inequalities in the income of the Chinese people, and this
income disparity has increased in the recent times, in part due
to a liberalization of markets within the country. The per capita
income of China is only about 2,000 US dollars, which is fairly
poor when judged against global standards. In per capita
income terms, China stands at a lowly 107th out of 179
countries. The Purchasing Power Parity figure for China is only
slightly better at 7,800 US dollars, ranking China 82nd out of
179 countries
Economic reforms started in China in the 70s and 80s. The
initial focus of these reforms was on collectivizing the
agricultural activities of the country. The leaders of the Chinese
economy, at that point in time, were trying to change the
center of agriculture from farming to household activities. At
later stages the reforms extended to the liberalization of prices,
in a gradual manner. The process of fiscal decentralization soon
followed.
This meant that government officials at the local levels and the
managers of various plants had more authority than before.
This led to the creation of a number of various types of
privately held enterprises within the services sector, as well as
the light manufacturing sectors. The banking system was
diversified and the Chinese stock markets started to develop
and grow as economic reforms in China took hold. The
economic reforms made in China in the 70s and 80s had other
far reaching effects as well. The sectors outside the control of
the state government of China grew at a rapid pace as a result
of these reforms. China also opened its economy to the world
for the purposes of trade and direct foreign investment.
China has adopted a slow but steady method in implementing
their economic reforms. It has also sold the equity of some of
the major Chinese state banks to overseas companies and
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bond markets during the middle phase of the first half of the
21st century. In recent years the role played by China in
International trade has also increased.
Inverted economy
In 2008, exports represented 40 per cent of China’s GDP and
growth was just under 10 per cent. In 2009, it is estimated
that growth will slow to between 6 and 7 per cent. This is a
marked contrast to most Western economies, where the GDP
will go negative. It underlines that the strength of the Chinese
economy has shifted from its export manufacturing capabilities
to its domestic market growth. There are many Chinese
companies that had developed niche markets or had their own
branding and distribution systems, which are using the current
situation to expand. The overall impact on the Chinese
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Implications Rationale
1. Narrowing of U.S.-China trade deficit
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3. Renminbi stabilization
4. Social Unrest
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Europe
The economy of Europe comprises more than 731 million
people in 48 different states [1]. It contributes 11% of the
world's population. Like other continents, the wealth of
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Europe's states varies, although the poorest are well above the
poorest states of other continents in terms of GDP and living
standards. The difference in wealth across Europe can be seen
in a rough East-West divide. Whilst Western European states all
have high GDPs and living standards, many of Eastern Europe's
economies are still rising from the collapse of the communist
Soviet Union and former Yugoslavia. Throughout this article
"Europe" and derivatives of the word are taken to include
selected states whose territory is only partly in Europe – such
as Turkey, Azerbaijan, and the Russian Federation – and states
that are geographically in Asia, bordering Europe – such as
Armenia and Cyprus.
Europe was the first continent to industrialize – led by the
United Kingdom in the 18th century – and as a result, it has
become one of the richest continents in the world today.
Europe's largest national economy is that of Germany, which
ranks fourth globally in nominalGDP, and fourth in purchasing
power parity (PPP) GDP; followed by France, ranking fifth
globally in nominal GDP, followed by the UK, ranking six
globally in nominal GDP followed by Italy, which ranks seventh
globally in nominal GDP, then by Spain ranking ninth globally in
nominal GDP.
These 5 countries are all ranking in the world's top 10,
therefore European economies account for half of the 10
wealthiest ones. The end of World War II has since brought
European countries closer together, culminating in the
formation of the European Union (EU) and in 1999, the
introduction of a unified currency – the euro. European Union
as a whole is, by far, the wealthiest and largest economy in the
world, topping the US by more than 2.000 billion at a time of
great economic slowdown– see List of countries by GDP. In
2009 Europe remained the world's wealthiest region. Its $37.1
trillion in assets under management represented more than
one-third of the world’s wealth. Unlike North America, it was
one of few regions where wealth surpassed its pre-crisis year-
end peak
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USA
The United States of America (US or USA) has the world’s
largest economy. According to the CIA World Fact book, 2007
GDP is believed to be $13.84 trillion. This is three times the
size of the next largest economy, Japan, which has a GDP of
$4.4 trillion. US dominance has been eroded however by the
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The forces of supply and demand directly drive the price levels
of goods and services. What to produce, and how much of it is
to be produced depends on the price level fixed by the
interaction of supply and demand.
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THANK YOU
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