The Great Crisis

Impact, Recovery & Revival

Bala S Chandran
(balu_c@yahoo.com)
Agenda…
1.What is Recession?
2.Why Financial Crisis?
3.The Genesis of the Financial Crisis
4.Impact on world financial system and world
economy
5.Global response
6.Impact on India
7.Way ahead
 What is Recession?
Recession is the economy shrinking for two
consecutive quarters with a decrease in the
GDP.

If the recession continues for next quarter, (>6 months)

then the economy goes through "DEPRESSION”

In simple:
Recession – is when your neighbour loses his job
Depression – is when you lose your job
 What is recession? (continued)
• In fact in order for the economy to be healthy
there needs to be some contraction and
expansion
• Even in a healthy economy there are periods
• of high growth, slow growth and no growth
• Recessions are something that cannot be avoided
• But if the contraction is for more than 6 months
the economy is said to be in recession
General consensus is that a recession is caused by numerous factors and is the end result of
several preceding events;
• Actions taken to Control the Money Supply in the economy;
• Financial Crisis;
• Bad Investments by businesses;
• Stock Market crashes;
• Factors that stunt short term growth in the economy, such as a sharp increase in OIL
PRICES;
• Wars
• Change in the nature of the business cycle due to Globalisation