Global Recession-a Macro Perspective

GLOBAL RECESSION-A MACRO PERSPECTIVE IILM-GRADUATE SCHOOL OF MANAGEMENT

RECESSION-THE TRIGGGER • • •

• • • •

Sub prime loans Financial deregulation Capitalism and concentration of economic power Q culture Free capital movement Misaligned exchange rate-imperfect market Carry trade activities

CONT…..  Securitization  Crude  Dependence

on American demand

REMEDIES-GLOBAL PERSPECTIVE  Financial

regulation  Stimulus –Keynes model  Bank rate-marginal efficiency of capital  Real GDP-PPP terms  global regulator  Industrialization  Currency regulation

CONT…….  Control

on credit creation  Cost reduction  FDI preference  Need for a new global currency

STRATEGIES-INDIAN PERSPECTIVE  Micro

finance  Bottom of pyramid  Exim policy  Absolute advantage  Rural banking  Efficient bailout

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