Recession
Recession
One of the most commonly used term nowadays is “recession”. We read about it in newspapers an year ago, then heard about it in television 3-4 months back and now we are getting a feel of what exactly it is. Recession is not a new phenomenon, it last happened in America during 2002-2003 and many times before that also. But what makes this recession so fearsome is its magnitude and the countries which are being affected by it. What started out as a bursting of housing bubble soon crippled the American Banks, then Its economy and now the pinch of it is being felt all over the world except, of course, Antarctica which is least affected by it due to obvious reasons. Many factors lead to recession, which economists believe will lead to depression. There’s no absolute definition of depression or recession as such with various economists publishing their own theories and definitions of these terms which are usually different in meaing from each other. Most widely used definition of recession is “Whenever a country witness decrease in GDP growth in consecutive 2-4 quarters, we say that the respective country is in recession” whereas “if there’s a decrease in GDP growth for more than 4 consecutive quarters, we say the respective country is in depression”.
My friends over here will be mentioning the obvious points like subprime crisis, bankruptcy of investment banks like AIG, Lehmann Brothers, Freddie Mac, faltering of mortgage loans and some other common points. I, on the other hand, will be talking about Foreign Investments in FOREX reserves and stock market. Forex reserves as you know are the reserves of foreign currency which a country have. Till the starting of this millennium, Rich countries, mainly America used to invest heavily in other countries forex reserves and withdrew it for profit whenever it liked. So there was availability of dollar which is a global currency as it is one one the five currencies officially supported by UN. But the trend
One of the most commonly used term nowadays is “recession”. We read about it in newspapers an year ago, then heard about it in television 3-4 months back and now we are getting a feel of what exactly it is. Recession is not a new phenomenon, it last happened in America during 2002-2003 and many times before that also. But what makes this recession so fearsome is its magnitude and the countries which are being affected by it. What started out as a bursting of housing bubble soon crippled the American Banks, then Its economy and now the pinch of it is being felt all over the world except, of course, Antarctica which is least affected by it due to obvious reasons. Many factors lead to recession, which economists believe will lead to depression. There’s no absolute definition of depression or recession as such with various economists publishing their own theories and definitions of these terms which are usually different in meaing from each other. Most widely used definition of recession is “Whenever a country witness decrease in GDP growth in consecutive 2-4 quarters, we say that the respective country is in recession” whereas “if there’s a decrease in GDP growth for more than 4 consecutive quarters, we say the respective country is in depression”.
My friends over here will be mentioning the obvious points like subprime crisis, bankruptcy of investment banks like AIG, Lehmann Brothers, Freddie Mac, faltering of mortgage loans and some other common points. I, on the other hand, will be talking about Foreign Investments in FOREX reserves and stock market. Forex reserves as you know are the reserves of foreign currency which a country have. Till the starting of this millennium, Rich countries, mainly America used to invest heavily in other countries forex reserves and withdrew it for profit whenever it liked. So there was availability of dollar which is a global currency as it is one one the five currencies officially supported by UN. But the trend