IT is not just a financial crisis

Abstract

It was suggested that the crisis in the economy of the West will get sorted in a few months and later it was felt in a few years. When there was a crisis in East Asia it was called Asian crisis and then there was a Latin American crisis. But when there is a crisis in Anglo Saxon economies it becomes global crisis. We also accept it as it is and feel since we are part of ” globalised” world we are also in crisis.

The crisis in Europe and US is not just a financial or economic one. It is a much deeper malice. The crisis is due to very high level of indebtedness of both Government and households. Two important developments have taken place in the last two decades. One is regarding the share of Global GDP on purchasing power parity basis. In the early nineties, the share of Group of 7 ( G- 7) was more than 50% and that of emerging markets nearly 36%. In the year 2012, it is expected to be reverse. That is the share of G- 7 in Global GDP is around 36 % and that of emerging markets above 50%. That is the nature of the crisis. The axis of economic power has irretrievably shifted to primarily to Asia and other emerging markets. Read more at: https://rvaidya2000.com/2012/04/04/it-is-not-just-a-financial-crisis/