Sunday, October 17, 2010

Great Recession and the world economy

As history is written, the Great Recession may come to be defined as the first pan-global economic event of the post-modern era, one spanning countries across the world. A study of its pervasive and enduring impact by the Brookings Institution compared (after adjusting for price changes) the difference between today’s projections (based on the IMF's World Economic Outlook) of 2013 GDP per capita income and pre-crisis estimates (WEO of October 2008) for various countries of the world.

It writes,

"The thick concentration of dark red throughout Eastern Europe and the former Soviet Union, where for many countries 2013 incomes will be 15 to 20 percent lower than had been previously expected, illustrates where the crisis has done the greatest and most lasting damage. Conversely, developing Asia—including the large economies of China, India, Indonesia and Vietnam—escape virtually unscathed. The advanced economies of Western Europe and North America fall in the middle of this range, with downward revisions of around 5 percent. In Africa, Latin America and the Middle East, meanwhile, the picture is much more mixed: each region is home to both star performers and countries devastated by the crisis, evidence of the regions’ low levels of economic interdependence. All told, 154 economies are now anticipated to be poorer in 2013 than had been thought two years ago, while only 25 are expected to be richer."


sai prasad said...

Does anyone know how to come out of this recession ? I doubt if any clearcut solutions exist for the problem. Are we to blunder our way out of it ?

Jayan said...

To be frank, this is a bit scary. It is high time we focus on more social-infrastructure. Like health care, education, urban public transport, internal tourism, water and renewable energy. Following adjectives to be added as needed == affordable,universal and quality.

gulzar said...

this recession and the search for policy solutions has completely and repeatedly exposed the limitations of macroeconomics.

the solution is to
1. weigh the pros and cons and arrive at whether there is reasonable unanimity about the need to act,
2. if yes, throw all possible policy alternatives at the problem and hope that atleast something will work!