It contain causes and effects of recession.it also contain information about the great recession.

1. By – Diksha Saxena
By-Diksha Saxena

2. What is RECESSION??
In economics, the term recession describes the
reduction of a country’s gross domestic
product(GDP) for at least two quarters.
The usual dictionary definition is “ a period of
reduced economic activity”.
National Bureau of Economic Research(NBER) is
the official agency in charge of declaring that the
economy is in a state of recession.

3. They define recession as:
“significant decline in economic
activity lasting more than a few
months, which is normally
visible in real GDP, real income,
employment, industrial
production and wholesale retail
sales”

4. Causes of RECESSION
 Currency crisis
 Energy crisis
 Under consumption
 Over production
 Fiscal policy

5. SWOT Analysis

6. Strengths
 Recruiting skilled employee
 Low cost work force
 Mistakes or the wrong decision can be analyzed
 Enough time to maintain work life balance

7. Weakness
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Household income decreases
Business profit decreases
Buying capacity decreases
Demotivation in people arises
Living standard of people decrease which tends to
-Unhealthy living environment
-Unhygienic and low grade edibles demand increases

8. Opportunity
It can be divided into two categories :
1- Opportunities to public
 Goods and services are available at lower cost
 Slash in the price of real estate
 Investment become easy

9. 2- Opportunities to organization
 Bureaucracy and politician becomes more co-operative
 The efficient workers are able to survive in the
organization, these in turn leads to increment quality
goods and services
 The remunerations , other expanses are decreased which in
turn increases the saving
 Policies become flexible

10. Threats
 High unemployment & job cutting rate
 Bankruptcies & black money circulation increases
 Inflation increases & GDP decreases
 Crime graph increases & research rate decreases
 Productivity decrease & dumping of product increases

11. The Great Recession – 2008

12. The global contraction from December 2007
to June 2009 that resulted in the world
economy shrinking for the first time since
1945.
The great recession was an ongoing market
global economic decline that began in
Dec.2007 and took a particularly sharp
downward turn in Sept.2008.

13. Causes of The Great Recession
 Housing market
 Risk taking behavior
 Excessive private debt levels
 Oil Prices
 Government policies
 Over Production

14. Some major events of the Great
Recession
 October 9, 2007 - The Dow Jones
Industrial average reaches an all-time
high of 14,164.53 points.
 December 1, 2007 - The recession
officially begins. The unemployment
rate stands at 5%.
 February 13, 2008 - President George
W. Bush signs the Economic Stimulus
Act of 2008, which gives individuals a
tax rebate and encourages business
investment.
 March 16, 2008 - Brokerage firm Bear
Stearns collapses and is bought out by
JPMorgan Chase.

15.  September 15, 2008 - Lehman Brothers files the largest bankruptcy case in
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U.S. history.
October 6 - 10, 2008 - The US government unveils a massive rescue
package for Citigroup.
December 9, 2008 - The government bails out General Motors and
Chrysler, offering an initial $13.4 billion from the TARP fund.
January 16, 2009 - The government unveils a huge package for Bank of
America, which includes $20 billion in bailout money and $100 billion in
guarantees.
February 17, 2009 - President Obama signs into law a $787 billion stimulus
package that includes tax cuts and money for infrastructure, schools,
health care, and green energy.
March 9, 2009 - The dow hits the low point of the recession, closing at
6,547 - down nearly 54% from its October 2007 high.
June, 2009 - The recession officially ends after 18 months, making it the
longest downturn in post war history.
October 2, 2009 - The unemployment rate peaks at 10%, hitting double
digits for the first time in 26 years.

16. Impacts of The
Great Recession

17.  Credit crunches
 Reduction in savings
 Unemployment
 Sales are not picking up
 Suddenly cash has
evaporated from the
market
 Profitability is seriously
hit

18. Effect of The Great Recession on
India
1.Investments in India in different types of policies of LIC and other
insurance companies.
Source:- IRDA

19. 2. Savings Rate in India
Source: Commerce Department, Bureau of Economic Analysis

20. 3.Consumer Confidence Index
Source: Hindustan times

21. 4.India’s unemployment rate
Source : Department of Labor

22. How to come out of recession?
It is unhealthy for any nation to be in Recession. So, government will
take certain countermeasures
to eliminate or reduce the effect of recession
Government has 2 plans
Fiscal Policies
(By Govt.)
Government influences the
economy by changing how
it (Government) spends
and collects money
Monetary Policies
(By RBI)
RBI manipulates
the available supply of
money in the country

23. Fiscal
Policies
1] Tax cuts for
businesses or
for individuals
More money
available for
spending
Demand picks
up; Market
can recover;
2] Automatic
fiscal policy;
Unemployment
Insurance
Some income to
unemployed
people to spend

24. Monetary
Policies
1] Reduce reserve
ratio
More money
available for bank
to give loans
2] Lower the
interest rates
Individuals take
more loan
3] Use its own
reserved
money to buy
Govt. bonds
It becomes an
income to Govt.
to inject money
into the market
Demand picks
up; Market
can recover;

25. Suggestions
 Promoting people to purchase and invest in the
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market
More Spending by Government to create new jobs
Limiting production
Attractive policies for the people having cash reserve
Cut down in labor size
Cutting down loan interests and promoting them
Organizing investors summit
Bringing old closed public mills to the functioning

26. Conclusion
 There is a panic among investors & they are rushing to
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get out of risky assets like stocks.
As the outcome of all these development the demand
for gold has increased.
As gold is seen as a safe haven, its price has risen to
record high.
The industries are sensitive to high interest rate.
The RBI & our Government is prepared for any
repercussion in the financial market

27. RBI’s Power or Government’s Power is double-edged
sword; Sometimes, their policies to recover from
recession can be counter-productive and it may further
worse in the situation.
Nation’s recession is controlled by the actions of
everybody living in that country.