Emerging Economy Should Consume More & Save Less Developed Economy Should Save More & Consume Less
Emerging Economy Should Consume More & Save Less Developed Economy Should Save More & Consume Less
Emerging Economy Should Consume More & Save Less Developed Economy Should Save More & Consume Less
Consumer wants
his buying cost
always to be low
Recession
When your neighbour Loses his job
• Depression
When you lose your job
• Recovery
When you go shopping at Big Bazaar
• Boom
When Kishor Biyani stops shopping at
Big Bazaar.
Recession
• Gross Domestic Product
(GDP)
• Employment
• Investment spending
• Capacity utilization
• Household incomes
• Business profits
• The Two Major Reasons For Recession
• Over Production
WORD OF MOUTH
• US HH Net Worth
• 1999: $42.1 Trillion (4.4 GDP)
• 2008: $51.7 Trillion (3.6 GDP)
• Peak Unemployment
• 1999: 4.4%
• 2008: 7.2%
• June 2009: 9.5%
• What caused the Global Recession?
Financial Crisis
• What caused the Financial Crisis?
Easy Credit & Lax Regulation
• What caused Easy Credit & Lax Regulation?
Savings Glut, Too much money chasing too few
opportunities
• What caused the Savings Glut?
Too much saving in Asia, and too little in the US
• Why Too Much Saving in Asia?
Asians like to save
• So what can we do to get out of the recession?
Asians should save less; Americans should save
more
Will it work?
• Geo-Political-Organization
– The opening of China
– The opening of India
• Technological Innovations
– Communication & Transportation
in the 21st Century
• Chinese factories can compete directly with US
Factories
• Tightening of Credit....