02-22-2009, 04:16 AM
Dear Participants
I think, we are going to have a good discussion here, and I agree with views of you people.
As a quick response and to enhance discussion, I am copy/pasting my reply here which I did there. This post was written in mid Oct, 08. Some points are time related. Please see my comments;
"Dear Friends
I am shocked to read if learned people cannot see the effects of recession. Most of the people on this thread seeing it at micro and individual level and trying to perceive big picture. First of all, its a tip of an iceberg at this stage. I hope it would be controlled that seems a hard task at this stage.
Recession is a MACRO level phenomena, but its impact is micro level. People have used monthly unemployment rates, but probably don't know impact of every percentage point change multiplied with more than 250 Million US population and on yearly basis. See how many additional total number of people would be unemplyed in next lets say two years by the time economy comes out of recession. Don't we know the effect of being unemployed? Overall consumption and spending level of the whole nation would go down in this period, which means more closure of factories and businesses, more unemployment, more miseries, more losing assets which we already had under normal conditions, less growth (GDP and GNP), worse effect on exports and imports, thus bad impact on foreign trade and spending. My friends, don't forget the size (which is top in world) of US economy and its linkages with foreign economies, thus, its overall impact on World economy and on world macro economic indicators.
We should have understanding of basic Macro economics equation of C + I + (X-M) + G. I would also recommend to read macro economic theory for cycles and recessions and their impacts, also read about the great depression and its horrible effects on public. Economists today are saying probably it is the largest recession since 1929/30's great depression.
http//en.wikipedia.org/wiki/Great_Depression
http//en.wikipedia.org/wiki/Recession
With little knowledge of economics, I would say it is a time for prayers.
Regards"
As far as liquidity crunch is concerned, it is another very interesting topic, about which I would try to provide my views soon.
Regards
I think, we are going to have a good discussion here, and I agree with views of you people.
As a quick response and to enhance discussion, I am copy/pasting my reply here which I did there. This post was written in mid Oct, 08. Some points are time related. Please see my comments;
"Dear Friends
I am shocked to read if learned people cannot see the effects of recession. Most of the people on this thread seeing it at micro and individual level and trying to perceive big picture. First of all, its a tip of an iceberg at this stage. I hope it would be controlled that seems a hard task at this stage.
Recession is a MACRO level phenomena, but its impact is micro level. People have used monthly unemployment rates, but probably don't know impact of every percentage point change multiplied with more than 250 Million US population and on yearly basis. See how many additional total number of people would be unemplyed in next lets say two years by the time economy comes out of recession. Don't we know the effect of being unemployed? Overall consumption and spending level of the whole nation would go down in this period, which means more closure of factories and businesses, more unemployment, more miseries, more losing assets which we already had under normal conditions, less growth (GDP and GNP), worse effect on exports and imports, thus bad impact on foreign trade and spending. My friends, don't forget the size (which is top in world) of US economy and its linkages with foreign economies, thus, its overall impact on World economy and on world macro economic indicators.
We should have understanding of basic Macro economics equation of C + I + (X-M) + G. I would also recommend to read macro economic theory for cycles and recessions and their impacts, also read about the great depression and its horrible effects on public. Economists today are saying probably it is the largest recession since 1929/30's great depression.
http//en.wikipedia.org/wiki/Great_Depression
http//en.wikipedia.org/wiki/Recession
With little knowledge of economics, I would say it is a time for prayers.
Regards"
As far as liquidity crunch is concerned, it is another very interesting topic, about which I would try to provide my views soon.
Regards
