Today when I was browsing through the papers I saw this article from Bhattacharya Saugata. Where in he has given the interlinkage between two countries in this globalised era. How a developed country's operations can hamper a country like ours... I am just providing the 2 paragraphs that article...
The Federal Reserve’s balance sheet operations will impact India’s growth prospects A fall of 20 percentage points in export growth in 2008-09 means a drop of Rs 2 lakh crore in potential income, far beyond anything that our stimulus packages envision
This last week, the US Federal Reserve cut its target rate more than expected to an unprecedented level close to zero. A few days later, the Bank of Japan sought to move in tandem and go on to Act 2 of its nineties’ quantitative easing (QE). What were the motives, why a shift in stance now, and what will be the consequences?
It might seem an academic exercise to analyse the Federal Reserve’s monetary policy actions last week, but it is not. It will have a deep impact on India’s economic future in the next year, even more than the measures now being taken by India’s policy authorities. Calculation shows that India’s exposure to global markets (exports of goods and services) in 2007-08 was $223 billion (or about Rs 11 lakh crore; India’s GDP was Rs 47 lakh crore, for reference). A fall of 20 percentage points in exports growth in 2008-09 means a drop of Rs 2 lakh crore in potential income, far beyond anything that our stimulus packages envision.
Bottom line:
By this we can say that no country can say that it is decoupled from the rest of the world at least at the time crisis!!!
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