INTERNATIONAL BUSINESS ENVIRONMENT

GLOBAL WORLD ECONOMIC PROBLEMS

BY ABY PHILIPOSE

GROUP- UMA1V22

CONTENTS

INTRODUCTIONTYPES OF CRISISHISTORY OF WORLD ECONOMIC CRISIS CAUSES OF WORLD ECONOMIC CRISIS OVERALL EFFECT OF A CRISIS RECCOMENDATIONSCONCLUSION

INTRODUCTION GLOBAL WORLD ECONOMIC PROBLEMS

 A situation in which the economy of a country experiences a sudden downturn brought on by a financial crisis. An economy facing an economic crisis will most likely experience a falling GDP, rising/falling prices due to inflation/deflation. An economic crisis can take the form of a recession or a depression

TYPES OF CRISISFOOD CRISIS FINANCIAL CRISIS OIL CRISIS INDUSTRIAL CRISIS EXPORT CRISIS

HISTORY OF WORLD ECONOMIC CRISIS

The World Economic Crisis came after the world war 2 At The time of a great Depression. It was the largest and most important economic depression in modern history, and is used in the 21st century as a benchmark in how far the world's economy can fall. The Great Depression had shocking effect on every country, rich and poor. Personal income, tax revenue, profits and prices dropped, and international trade come by a half to two-thirds.

CAUSES OF WORLD ECONOMIC CRISIS

As a Result of Economic Crisis 13 Million of People became unemployed. Unemployment in the United States rise to

25% and in some countries rise as high as 33%.

There is a sharp fall in export demand. Stock Market collapse. Industrial production fell.banks went out of business.

OVERALL EFFECT OF A ECONOMIC CRISIS

Higher bank capital requirements on the way.Everyone should look for "exit

strategies”BIS study confirms some perceptions of Basle

accord. Banks continue retreat from South. Asia: Crisis causes massive unemployment.Massive retreat by banks from emerging

markets.Financial turmoil spreads across the world.

RECCOMENDATIONS IMF needs to neutralise the outflow of FII money by

unwinding the market stabilization securities that it had used to sterilis the inflows when they happened

. This will mean drawing down the dollar reserves which is important at this hour .

In the IT sector, there should be correction in salary offerings rather than job cutting.

Public should spend wisely and save more.Taxes including excise duty and custom duty should be

reduced to lighten the adverse effect of economic crunch on various industries.

Also, the government should try and improve liquidity, while CRR and SLR must be cut further.

CONCLUSIONAlternative global monetary systemGovt., Political class must take

responsibilities IME must also be accounted for crisis Experts suggest that if reforms aren’t

made then the world will suffer more crisis

A well governed state can provide anti-dote for the ills of the market

Nominal exchange rate as an anchor for inflationary expectations, pricing decisions and wage setting