MANAGING THE ECONOMIC TURBULENCE THROUGH GLOBAL GOVERNANCE
Abstract
The on-going turmoil in the world economy, which can be seen as a carryover of the 2007 global financial crisis, poses a threat to trigger yet another massive worldwide recession. The dire circumstances have instilled fear throughout the developed world to such an extent that The Economist in London has already forecasted a double-dip global recession initiated by the United States. The world stock exchanges went into a complete meltdown due to the turmoil, which was mostly brought on by the sovereign debt crisis in several European nations and the significant downgrade of the US sovereign long-term credit rating by Standard & Poor. Virtual insolvency has resulted from the Eurozone's sovereign credit crises in Greece, Ireland, and Portugal. Right now, Spain and Italy are in danger due to the crisis, and it is unlikely to end there. The common people's purchasing power decreases as a result of the sovereign debt being transferred to them, and this, along with the rise in unemployment, induces a severe reduction in domestic demand. Recently, India's Finance Minister Pranab Mukherjee issued an announcement to the international community that, if the crisis is not handled harshly, it could spread and potentially result in a double-dip global recession.
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