economic crisis in india and trade cycle in europian countries

8/14/2019 Economic Crisis in India and Trade Cycle in Europian Countries

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osperity or Boomecession or Decline

DepressionRecovery

/downs or fluctuations in business economic activi

:-ASES OF TRADE CYCLE,RESENTED BY

IYA CHATTERJEEUSPENDU NAGANDIP MANNA


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Trade before the 16thcenturyContinental trade only (Europe-Middle East-

Asia);Around 1000 AD Europe was relatively

underdeveloped relative to Asia and the Islamic

world;Limited manufacturing activity, trade relies on

primary goods, materials and simple manufactured

goods.


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( ) ( :nterregional trade flows around year 1000 source& ,indlay O Rourke 2007) tofrom

WestEurope

EastEurope

IslamicWorld

CentralAsia

Sub-SAfrica

SouthAsia

SE Asia East Asia

West

Europe

swords slaves,

swords

_____ ______ _____ ______ ______

EastEurope

slaves,furs,

silver

slaves,furs, silver

furs,swords

______ _____ ______ ______

IslamicWorld

spices,

textilessilk, sil

textiles

silver

textiles salt tex,

manuf,swords

War

horses

gold spices

CentralAsia

______ silver Paper,

silver,slaves

______ Silver,

reexport

______ horses

Sub-SAfrica

______

_______ Gold,

slaves,

______ Timber,

iron

______ _______

SouthAsia

______ _______ Spices,

silk, tex

Peper,

textiles

textiles Textiles,

pepper

Textiles

SE Asia ______ _______ Spices,perfume

______ ______ Silk spice,

rice

Perfume

spiceswoodEast Asia______ _______ Silk,

porcelan

Silk, tea ______ Silk,

porcelan

Silk,

copper


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THE ECONOMIC CRISIS


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Spread of the Economic Crisis and Impact

Meltdown of stock prices across the globeMarket price of stock in Freddie Mac plummeted from$63 on October 8, 2007 to $0.88 on October 28, 2008.Capital base of banks shrank and severelycurtailed their ability to make more loans : Lead to Credit Freeze.Lead to rise in Demand for Dollar and fall in currency value of othercountries.

Collapse of Financial Institutions in several parts of the worldLehman Brothers; AIG, Freddie Mac and Fannie Mae etc.Central Banks in vulnerable countries such as Iceland becomeBankruptInvestors across the globe lost huge amount of their investmentsSevere Credit squeeze and Liquidity crunch for the industry

Housing; Automobiles; Retail; Services etc.Leads to drop in international trade in commodities and services.Job cuts and serious unemployment problem followed.


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lobal Response tohe Crisisq overnment take over of Banks and Financialnstitutions on the verge of Collapse to prevent. -he financial system collapsing Examplesq fforts were made to coordinate interest rate

,uts and pursue actions to restart and restore.onfidence in credit marketsq .acilitation of mergers and acquisitionsq arge Scale Government bailout packages for.ffected industriesq .S Bailout package for affected Industries .anks and FIs exceeds 1 trillion US$ : ,ajor economies such as European nations Japan,ussia China come out with huge bailout packagesnd stimulus packages to bail out institutions and

ick start their economies .


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qSignificant Currency devaluationqDemand side problemqDrying up of external demand for goods and

:services due to major problems in US and EuropeIndia s major trading partners

qLower domestic demand due to buyers hesitation to

.spendq %Exports down by about 20qIndian Bankers are also in great danger as their

. :-foreign operations crashed eg

q : ;Major affected sectors are Real Estate Auto, ; ;Industry Textiles Gem and Jewelry Chemicals and

; ; .Allied Products Iron and Steel Capital Goods etc

MPACT OF THE CRISIS ON INDIA


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INDIA S RESPONSE


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INDIA S RESPONSETO THE CRISIS

economic crisis in india and trade cycle in europian countries

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