Expert Zone

Straight from the Specialists

If the U.S. and EU slide into recession

(The views expressed in this column are the author’s own and do not represent those of Reuters)

There are apprehensions that the U.S. and EU could drift into recession again. The economic crisis of 2008 unnerved every country, with growth either turning negative or falling drastically. The recovery from that recession was weak and any relapse could be prolonged.

Following the crisis, the Federal Reserve and the U.S. government infused liquidity and banks and companies were flushed with cash, with interest rates close to zero.  In debt-ridden Europe, sovereign default was postponed with compulsory adoption of austerity measures.

But the U.S. and EU have maintained an uneasy growth for the past last three years with low investment, low consumption and high unemployment. And they are once again gravitating towards recession.

Fallout of recession in euro zone

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

It will not be before February that the euro zone GDP numbers are out. The available information so far indicates the economy is already in recession. This will have serious consequences for all countries, including India.

If the U.S. slips into recession

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

In his testimony to the Joint Economic Committee of Congress, Federal Reserve Chairman Ben Bernanke described the U.S. economy as “close to faltering”. That is disconcerting enough. But with the EU also on the edge of a financial crisis, the threat to the world economy can be enormous.

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