Before the burst of the bubble this time, the majority view was that aggressive policy rate reductions enabled us to stave off a sharp and serious economic contraction.
The economic downturn shows that India's trade and industrial policy regime is inadequate to mitigate the retrenchment of workers across manufacturing sectors or create jobs.
Because a recession is a broad contraction of the economy, not confined to one sector, the Committee emphasises economy-wide measures of economic activity.
Even though the country did not experience an economic downturn during the global financial crisis, the marked drop in real GDP growth to below 2% in 2009 worried many consumers and had a negative impact on sales.
A decline in long-term interest rates in anticipation of the FRB's monetary easing should prevent a recession, but the US's potential growth rate will likely fall to the upper 1% range in 2020, partly due to supply constraints.
Measuring the Business Cycle Expansion is measured from the trough or bottom of the previous business cycle to the peak of the current cycle, while recession is measured from the peak to the trough.
These developments suggest that the current financial crisis and economic downturn were essentially caused by the cycle of the generation and bursting of a global credit bubble, or the cycle of the overheating and corrections of financial and economic activity, similar to cycles that occurred repeatedly in the past.
As I said at the beginning of this speech, the current economic downturn is a process of correcting various imbalances that had accumulated over the past several years, and the severe situation will therefore likely continue for some time.
(Recessions) are essentially a result of a supply of money that is too small, and to that extent are monetary phenomena… Complaints about excessive habits of saving are in such circumstances calculated to confuse the mind of the public and to distract attention from the shortcomings of monetary policy.”.
recession in 1981-2 in order to break the back of inflation. That recession was destructive, but it had one silver lining: an inspiration to the world that an independent central bank can take tough measures to ensure price stability.
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