The current account deficit (CAD) continues to remain in the limelight, having risen to 2.4% of GDP in quarter ended June 18. While trade and invisibles forms one part of the balance of payment equation, the other part is called Capital flows (or financial flow). Capital flow helps finances the deficit in trade. For instance … Continue reading Capital Inflows – FDI, FII and the Rest..
The sign of the busting of bubble started to show from the middle of 2006 with the transition of loan from ‘interest only’ and ‘teaser rates’ to regular payments. This coupled with increase in market interest rate led to doubling or even tripling of monthly repayments. Unable to pay the increased monthly repayments, borrowers began defaulting and surrendering their houses adding to the pile of inventory of unsold houses. Unsold inventory was up nearly 40% in sept ’06, around the time when prices began to decline.
Continue reading “Subprime Crisis… (Part II)”
The subprime crisis has caught the global attention again, today marking the collapse of Lehman Brothers, ten years ago. The crisis remains a classic case study for the enormity and swiftness with which it unfolded. A brief attempt to revisit and simplify the complex issues involved..The genesis of the issue, paradoxically, lies in another crisis … Continue reading Subprime Crisis – Ten Years On.. (Part I)
The tariff hike on some of the Chinese goods by US government has shown that Mr Donald Trump is serious about what he talked about during his election campaign. Even though he has been facing severe criticism for his protectionist trade policies, his point of view with regard to China needs to be understood properly. A brief attempt..
Continue reading “US China Trade War – Understanding the Dynamics..”
The world economy is expected to witness a reasonable improvement in growth at 3.5% in 2017 against 3.1% in 2016 as per the IMF report released this week. More importantly, growth improvement is expected to be broad based with advanced economies, in the throes of subpar growth since the global crisis, also witnessing momentum gain. A … Continue reading IMF World Economic Outlook April'17
The changes in the H-1B visa rules marks the culmination of last few months of intense action and debate on the issue. The issue has just got even more polarised this week with Australia and New Zealand proposing changes in their foreign national employment conditions. So what exactly is H 1B visa and implication to different … Continue reading Understanding H-1B Visa Program..
The change in policy stance of the world’s largest economy has added greater uncertainty to decades of efforts at globalisation. However, while Donald Trump has emerged as a villain, global trade has been witnessing a slowdown since 2008, after the global crisis. For now.. A look at the state of global trade and across major countries.. … Continue reading Global Trade – An Overview…
Greece debt crisis seems to have divided Euro area and IMF with fresh warning coming from IMF of potential debt default by Greece. The crisis which began in 2009, causing erosion of as much as 25% of GDP, unemployment rate at nearly the same percent, refuses to provide any comfort to the nation as also … Continue reading Understanding Greece Debt Crisis…
The swearing-in speech of Donald Trump and his initial decisions put a big question mark on the future of cooperation in the world economy. The talks on protecting US jobs, factories, imports tax, exports incentives etc has the potential to erode the gains of several decades which provided significantly higher growth rate and improved productivity. … Continue reading End of Globalisation..???
Zimbabwe witnessed unprecedented increase in prices during 2007-09 which could be reined-in only after abandonment of its currency. Like in all earlier episodes, this bout of hyperinflation, was also caused by sharp rise in money supply due to reckless printing of money to finance government deficit. Currency notes issued during this time ranged from Z$ 1 … Continue reading Understanding Hyperinflation – Economy of Zimbabwe..