News World may slip into Great Depression of 1930s, Rajan warns global central banks

[Deepu]

RBI Governor Raghuram Rajan has asked central banks from across the world to define "new rules of the game" as he warned that the global economy may be slipping into problems similar to the Great Depression of the 1930s.

Rajan, who has been warning against competitive monetary policy easing by central banks, however, said the situation is different in India where RBI still needs to bring down lending rates to spur investments.

He expressed concern that the world may be slipping into the kind of problems of the depression of the 1930s and an international consensus was needed to be built over time.

"We need rules of the game in order to effect a better solution. I think it is time to start debating what should the global rules of the game be on what is allowed in terms of central bank action," he said at a London Business School (LBS) conference in London on Thursday.

World may slip into Great Depression of 1930s, Rajan warns global central banks

 

[IndianMascot]

What will happen if market slips as he is fearing.

 

[Technoglitch]

another round of job loss and pink slips.

 

[IndianMascot]

What is pink slips?

 

[Sanjeev]

Economic growth will destabilize

 

[Technoglitch]

What is pink slips?

Pink slip refers to the American practice, by a personnel department, of including a discharge notice in an employee's pay envelope to notify the worker of his or her termination of employment or layoff.[1] The "pink slip" has become a metonymy for the termination of employment in general. According to an article in The New York Times, the editors of theRandom House Dictionary have dated the term to at least as early as 1910.

 

[IndianMascot]

Oh then we may also get chance to get pink slips if 1930 thing repeats.

 

[NinadG]

But today's report refutes Rajan's claim....
IMF counters Rajan's Great Depression comment
With Reserve Bank of India’s Raghuram Rajan ringing alarm bells about the world economy facing the Great Depression-like problems, an International monetary Fund research paper has countered his views and says monetary policy easing alone can't be blamed for triggering a financial crisis.

Rajan, who himself has been IMF's Chief Economist and is among the few to have rightly predicted the financial crisis of 2007, has triggered a debate among policymakers and economists with his warning against central banks globally being pushed into "competitive monetary policy easing".

Countering his views, the IMF Working Paper now says the monetary policy easing alone cannot be blamed for the financial instability and the bigger cause for the global recession in the past, including in 2007-09, has been the "absence of an effective regulatory framework aimed at preserving financial stability".

IMF counters Rajan's Great Depression comment - Rediff.com Business

 

[IndianMascot]

So as per IMF, we should not worry of economic crisis

 

[Technoglitch]

IMF says lot of things