FE@CAMPUS MASTERMIND: Response by Vishal Rajai to question for Jan 21-27

Fe at campus

Response by Vishal Rajai to question for Jan 21-27:IS AUSTERITY DEAD IN THE CONTEXT OF GLOBAL RECOVERY?

Austerity is like a government multiplier which ensures that about 1.5 is taken out of the economy when the government spending is 1 dollar, in periods of recession and high unemployment, austerity policies are counter-productive, as reduced government spending can increase unemployment, reduced government spending reduces GDP. This means that the debt to GDP ratio examined by creditors and rating agencies does not improve austerity increases inequalities. Austerity increases the social instability in society. Hence it does not resolve the economic crisis.

Vishal Rajai.

St. Kabir Institute of Professional Studies,Ahemdabad.

vishal12@skips.in

(This entry is part of our FE MASTERMIND contest. The views expressed in this article are personal and not that of the newspaper.)

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