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Showing posts with the label Global Recession

Notable World Recessions in the Last 100 Years: A Historical Perspective

  Over the past century, the global economy has experienced various periods of economic downturns and recessions. These episodes of financial turmoil have left a lasting impact on nations, businesses, and individuals worldwide. In this blog, we will explore some of the notable world recessions that have occurred in the last 100 years, examining their causes, effects, and lessons learned.   The Great Depression (1929-1939) One of the most infamous recessions in history, the Great Depression originated in the United States but quickly spread to other parts of the world. Triggered by the stock market crash of 1929, the crisis was exacerbated by a series of policy mistakes, including protectionist trade measures and contractionary monetary policies. The resulting economic contraction led to widespread unemployment, poverty, and deflation. Lessons learned from this recession shaped future economic policies, emphasizing the need for government intervention and regulatory oversight.  

Inflation & India

 Inflation is a persistent and pressing issue in India that has significant implications for the country's economic stability and the well-being of its citizens. Inflation occurs when the general price level of goods and services in an economy increases over time. In India, inflation has been a persistent problem over the last few decades, and it is a critical factor that shapes the economic policies of the government.   Inflation in India has been influenced by various factors, including supply-side factors such as the increase in the cost of production and distribution of goods, and demand-side factors such as the rise in disposable income, population growth, and urbanization. Additionally, international factors such as global commodity prices, exchange rates, and geopolitical developments can also have an impact on inflation in India.   Over the years, the government of India has implemented various measures to control inflation. The Reserve Bank of India (RBI) is respon

High GDP by 2022 and Crisis

  Gross Domestic Product GDP is the final monetary value of the goods and services produced within the country during a specific period, normally a year. Three main sectors that contribute to GDP in India 1. Agriculture 2. Industry 3. Services                                                              GDP is measured over market prices and there is a base year for the computation. Nominal GDP is the value of all final goods and services that an economy produced during a given year. GDP can be calculated in three ways, using expenditures, production, or incomes. It can be adjusted for inflation and population to provide deeper insights.   In January 2015, the government moved to the new base year of 2011-12 from the earlier the base year of 2004-05 for national accounts. The base year of national accounts had previously been revised in January 2010. In the new series, the Central Statistics Office (CSO) did away with GDP at factor cost and adopted the international p

Venture Capital Financing

Venture capital investment is a way in which investors support entrepreneurial talent with finance and business skill to exploit market opportunities to obtain long term capital gain. It's defined as an equity-related investment in the early stage of the growth-oriented business firm. In return, VC has a minority shareholding in the business and the irrevocable right to acquire it. Five important things that happen in Venture Capital investment It works in new companies to raise fund It is a long-term investment in a growth-oriented firm. Active involvement of VC firm to managements and skills High risk-return spectrum It is early finance to firms until they are established

Self reliant economy doomed by imports

  Pandemic outbreaks came for rethinking world's fate for communication, travel and living standard. What's new normal is what will  happen  in a pandemic situation when all people of the world suffer. Consumer need is volatile where the economy is unsustainable. In the past several years this situation was getting handled by world top players.   India imported US$480 billion worth of goods from around the globe in 2019, up by 22.8% since 2015 but down by -5.7% from 2018 to 2019.   India's imports data by World top exports The following product groups represent the highest dollar value in India’s import purchases during 2019. Also shown is the percentage share each product category represents in terms of overall imports into India. Top Imports 1.       Mineral fuels including oil: US$153.5 billion (32% of total imports) 2.       Gems, precious metals: $60 billion (12.5%) 3.       Electrical machinery, equipment: $50.4 billion (10.5%) 4.       Machinery including computers:

What is stimulus package?

A stimulus is a package of economic measures put together by a Govt. to stimulate a floundering economy. The objective of a stimulus package is to reinvigorate the economy and prevent or reverse a recession by boosting employment and spending. Types of Stimulus Monetary Stimulus Fiscal Stimulus Quantitative Easing The monetary stimulus consists of cutting interest rate where fiscal stimulus has a cutting taxes or increased spending. Quantitative easing is an expansionary monetary policy in which the country's central bank purchases a large number of financial assets such as bonds from commercial banks and other financial institutions.

Global Impact of Coronavirus

One doomsday scenario in which the coronavirus outbreak could cost the global economy up to $2 trillion this year. After $2 trillion shortfall in global income, COVID-19 affects oil-exporting countries and also other commodity exporters badly. China might recover from COVID-19 impact by lending as China is a crucial source of long term borrowing for developing countries.  COVID-19 has brought global recession by depressing global annual growth this year to below 2.5%, the recessionary threshold for the world economy. Central Banks are not in a position to solve this crisis alone. Their macroeconomics policy will need public investment and targeted welfare support. At present scenario, coronavirus has surpassed 100000 confirmed cases worldwide, it will make the impact more severe to the global economy.