Deconstructing the Global Recession Myth

The effect of global recession features comprised the talk of the town of the town earlier the year 2007 ended. Come up 2008, different surmises around the causes and effects of the financial meltdown rise up. Since a standard definition, the International Monetary Fund (IMF) asserted that the global economy comprises so entering a historic period of slowdown that we experience never come across since the Great Depression of the 1930s. IMF conceives that global recession is happening when global rate of growth bumps off below 3%.

Nevertheless, the IMF definition of a bad economy is hush up quite obscure. It accepts to be mentioned that there is a vast conflict between the growth rate of developing and developed countries. It's more lenient to specify global recession by admitting into account the recession encountering in most developed countries. National recession is characterized as the decline in the productivity of a country. A 1974 article in the New York Times created a widely accepted indication of recession which is a period of two consecutive quarter decline in the Gross Domestic Product (GDP)—the measure of national productivity—of a country.

By using such definition, we can assume that the root cause of global recession can be traced down in the real economy—the production and consumption of goods. But this is contrary to the explanations propagated in mainstream media nowadays. Instead, both government and private institutions, specifically in the United States, are attributing the crisis merely to corruption, excesses and greed of investors and speculators in the financial market. This is to say that the cause of recession is limited in the confines of the Wall Street, taking the real economy clause entirely out of the picture.

Amidst all these, some economists are bold enough to contradict this downplaying peddled by major economic players. They are saying that the so called period of bad economy that we are about to enter is nothing but an inevitability, a lapse in capitalism and globalization that we refuse to acknowledge.

Economies around the world, most especially the United States have been suffering from the crisis of overproduction and underconsumption for decades now. Alternative explanations as far as the root cause of global recession is concerned are saying that the financial meltdown can be attributed to such crisis more than anything else.

Deconstructing the Global Recession Myth

Thursday, April 30, 2009

Deconstructing the Global Recession Myth

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