Financial turmoil which surfaced in August 2007 in the US financial system?as a result of defaults of sub-prime mortgage loans?has blown into an unprecedented financial crisis engulfing international money, credit, equity and foreign exchange markets. It was preceded by an extended phase of buoyant world economy characterized by output expansion, burgeoning world trade, favourable financial and economic conditions, liquidity overhang and low interest rates. Economists termed it as a period of Great Moderation.
The Great Moderation soon turned into Great Dismay when global financial confusion?simmering since August 2007?began unleashing its full fury in September 2008 with a series of failures of major financial institutions. The crisis has traversed from the financial to the real sector and it now looks like that the recession?which is keeping world governments on tenterhooks?will be deeper and the recovery longer than earlier anticipated. Though adversely affected by global meltdown, Indian economy has shown considerable absorption capacity and resilience.
This book is all about current economic crisis, its origin, causes, impact, world response, world economic outlook and lessons to be learnt. The focus of the work, however, is on the impact of global economic crisis on India and the policy response by the Government of India, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and other agencies. Being topical, the work will interest a cross-section of readers including teachers and students of economics, commerce, management and also political leaders, analysts, academicians and laypersons who are mystified about a subject unrelated yet close to them.