Global Recession
Author Smith Patodekar
Roll No.- 0222108
Literature Review:-
Asian stock markets, a decade after global recession, coupled or decoupled?
T. G., S.(2023) tells a theoretical justification for why more informal employment tends to be found in economies with higher inequality. It challenges the idea that the informal economy expands during economic downturns and argues that a variety of institutional and economic factors, such as regulations governing the labour market, taxes, credit availability, and social norms, have an impact on it. Workers in more unequal economies may choose to work in the unorganised sector in order to avoid the negative effects of unemployment, but this growth comes with its own set of problems. The note calls for policies that address the underlying factors driving the growth of the informal sector, such as labour market reforms, investments in education and training, and tax reforms, in order to achieve inclusive growth and reduce income inequality.
Empirical Analysis
GOYAL, S. et al.(2023) says that this article discusses the challenges and opportunities facing the Indian IT industry due to global technological advancements and economic recessions. The study aimed to estimate the relative efficiency of the top 18 Indian IT software service companies using data envelopment analysis. The results showed mixed trends in efficiency, with the top five companies being more efficient than the rest. Tata Consultancy Services, HCL Technologies Ltd., and Tech Mahindra Ltd. were found to be the most efficient, while Infosys Ltd. and Mphasis had lower efficiency. The article concludes that inefficient companies need to increase worker productivity and adopt best practices to become more efficient, and that diversifying service offerings beyond software development and investing in innovation is critical to sustain growth in the highly competitive global market.
Scenario of the Indian IT/ITES sector.
TIWARI, B.; LENKA, U. (2023) stated that due to both the 2008 economic recession and worldwide technology improvements, the Indian IT industry has had difficulties. Data envelopment analysis was used in a study to calculate the relative effectiveness of the top 18 Indian IT software service providers. Tata Consultancy Services, HCL Technologies Ltd., and Tech Mahindra Ltd. were found to be the most effective, while Infosys Ltd. and Mphasis had lower effectiveness, according to the survey. According to the report, inefficient businesses could boost employee productivity and follow best practices to become more effective. It is also essential to invest in innovation and diversify service offerings beyond software development in order to continue growth in the fiercely competitive global market. Over the past three decades, India’s IT industry has risen quickly, contributing 8% to India’s GDP.
Is “Pink Slip”, the only Mantra for survival!
BASU, S.; DATTA, S. (2023) says article makes the case that giving employees the “pink slip,” or terminating their employment, has detrimental effects on both the employees and the company. Due to job insecurity, it fosters negative attitudes towards management and discourages talented workers from accepting employment. The article suggests, instead, that knowledge workers be kept on during times of economic downturn and that surplus workers be used to the organization’s long-term advantage. Retention will ensure better commitment and productivity in the post-recessionary period while saving the organisation money on recruitment and training expenses and fostering high morale and commitment from the organization. This strategy also satisfies corporate social responsibility to Indian citizens.
IT&C – A Job-Creating Industry during Crisis.
FLOREA, I. C. (2023) says the Romanian IT&C sector has been able to quickly rebound from the global financial crisis and is regarded as a strategic asset for economic growth and job creation. The IT&C sector kept on hiring a lot of professionals even though the recession had an impact on many other industries. This study examines the local IT&C sector, with a particular emphasis on the software and services sector, and compares it to the global picture, highlighting the sector’s capacity to generate employment even in difficult economic times.
Inequality and Size of the Informal Sector during Recession: A Note.
CHOWDHURY, S. R(2023) states that this note offers a theoretical justification for why economies with greater inequality typically have larger informal sectors. It disputes the notion that the informal economy grows during recessions and contends that it is influenced by a variety of institutional and economic factors, including laws governing the labour market, taxes, credit availability, and social norms. In more unequal economies, workers may opt to work in the informal sector to avoid the negative effects of unemployment, but the growth of the informal sector has its own share of drawbacks. In order to achieve inclusive growth and reduce income inequality, the note calls for policies that address the root causes of the growth of the informal sector, such as labour market reforms, investments in education and training, and initiatives to do so.
Why we aren’t predicting a global recession.
s. l.(2023) says global economy is facing uncertainties that could slow growth, but the baseline assumption remains modest growth. In similar situations in the past, global growth has fallen to around 2.5%, only to rebound. However, additional major negative shocks could trigger a global recession. Monetary policy’s effectiveness has waned, and governments must be ready to intervene if necessary. Tensions between the United States and China, as well as factors such as the inversion of the US yield curve, may add to the gloom, but policy actions by central banks may prevent a drop in investment and panic among household.
Global: A weak 2023, but no global recession
Economic Outlook,[s.l.] (2023) says the global economy in 2023 but does not forecast a global recession. The current situation is similar to past episodes of uncertainty, such as in 2012 and 2015, where growth slowed to around 2.5% but rebounded afterwards. The assumption is that the global economy will experience a similar “mini cycle” with a modest growth rebound. However, the risk of a self-perpetuating slowdown should not be ignored, especially if annual GDP growth falls by over 1 ppt from its peak. The effectiveness of monetary policy has weakened, and governments in advanced economies should be ready to step in to provide economic support.
Impact of Global Recession on the Export Performance of Apparel Industry in Tirupur.
YOGANANDAN, G.(2023) says The time-series approach is one of two approaches for measuring an industry’s export performance discussed in this article. According to one study, 54% of exporters believe external environmental factors have a strong influence on their export performance, 26.7% believe it has a moderate influence, and 19.3% believe it has a weak influence. According to the study, 38.3% of apparel exporters started their business before 1995, 43.7% started between 1995 and 2005, and 18% started after 2005. Furthermore, while India was able to maintain total exports during the pre- and post-crisis periods, textile exports, readymade garment exports, and knitwear exports from Tirupur were severely impacted.
Slower Growth and Vulnerability to Recession: Updating China’s Global Impact.
TYERS, R.(2023) says China’s structural shift is lowering its surplus savings and causing global financial markets to tighten, with net advantages to advanced economies. However, a Chinese recession might be contractionary for advanced economies, resulting in job losses in the US and other countries in the absence of additional monetary stimulus. The text urges greater economic policy collaboration between China, Europe, and the United States in order to reduce the externalities of a prospective Chinese recession.
Conclusion:-
The articles chosen for this roundup include a wide range of global economy subjects, including the Indian IT industry, informal employment, the impact of layoffs, and the global recession prognosis.
The papers by GOYAL, S. et al. and TIWARI, B.; LENKA, U. investigate the efficiency and effectiveness of the Indian IT sector, emphasising the necessity for enterprises to engage in innovation and diversify their services in order to remain competitive. Meanwhile, BASU, S., and DATTA, S. suggest that layoffs may be harmful to both individuals and businesses, advising organisations to keep their knowledge workers and utilise excess personnel to their benefit.
The paper by CHOWDHURY, S. R investigates the link between inequality and the size of the informal sector, proposing solutions to address the underlying issues driving informal sector expansion in order to promote inclusive growth and reduce income inequality.
FLOREA, I. C. explores Romania’s IT&C industry, proving its potential to create jobs even in difficult economic circumstances and emphasising its strategic asset for economic progress.
Finally, s.l.’s and Economic Outlook’s articles give an overview of the worldwide economic condition. The baseline assumption is for modest growth, but there are uncertainties and hazards that might restrict global growth. However, central bank policy efforts may avoid a reduction in investment and fear among consumers, signalling that a worldwide recession is imminent.
References:-
T. G., S. Asian stock markets, a decade after global recession, coupled or decoupled? Journal of Public Affairs (14723891), [s. l.], v. 22, p. 1–12, 2022. DOI 10.1002/pa.2727. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=7e9f73e8-b0f6-3004-a334-5b2de203d4e3. Acesso em: 13 maio. 2023.
GOYAL, S. et al. Estimating technical efficiencies of Indian IT companies for setting improvement targets for inefficient companies: An empirical analysis with workers’ effort as key input. Work, [s. l.], v. 66, n. 4, p. 885–900, 2020. DOI 10.3233/WOR-203233. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=b0c33669-ad87-3cc1-bdf9-24e0ca755c42. Acesso em: 13 maio. 2023.
TIWARI, B.; LENKA, U. Engaging workforce in downsized firms: scenario of the Indian IT/ITES sector. Industrial & Commercial Training, [s. l.], v. 50, n. 1, p. 32–38, 2018. DOI 10.1108/ICT-06-2017-0045. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=f199a107-158c-3807-827f-f8b51e7de1b4. Acesso em: 13 maio. 2023.
BASU, S.; DATTA, S. Is ’Pink Slip’, the Only Mantra for Survival! Journal of Contemporary Management Research, [s. l.], v. 4, n. 2, p. 1–10, 2010. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=7a8cf8b0-1b38-3e97-8613-742d7d1ef33e. Acesso em: 13 maio. 2023.
FLOREA, I. C. IT&C – A Job-Creating Industry during Crisis. Ovidius University Annals, Series Economic Sciences, [s. l.], v. 15, n. 2, p. 86–91, 2015. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=8ac0bc27-2af9-3446-aab8-3c06c9b645d4. Acesso em: 13 maio. 2023.
CHOWDHURY, S. R. Inequality and Size of the Informal Sector during Recession: A Note. Metroeconomica, [s. l.], v. 64, n. 4, p. 591–597, 2013. DOI 10.1111/meca.12020. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=eb7f9a72-6c05-3f61-a9a1-78513ed8aef2. Acesso em: 13 maio. 2023.
Why we aren’t predicting a global recession. Economic Outlook, [s. l.], v. 43, n. 4, p. 22–26, 2019. DOI 10.1111/1468-0319.12449. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=618c43c5-ec46-3acb-a96c-e3516ad8ed21. Acesso em: 13 maio. 2023.
Global: A weak 2023, but no global recession. Economic Outlook, [s. l.], v. 46, n. 3, p. 37–39, 2022. DOI 10.1111/1468-0319.12639. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=fcd0d51f-9f38-3c00-853b-f635a75c3edd. Acesso em: 13 maio. 2023.
YOGANANDAN, G. Impact of Global Recession on the Export Performance of Apparel Industry in Tirupur. Finance India, [s. l.], v. 34, n. 4, p. 1371–1378, 2020. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=1a7ea0a9-d54a-320b-a457-11f3d62c8654. Acesso em: 13 maio. 2023.
TYERS, R. Slower Growth and Vulnerability to Recession: Updating China’s Global Impact. Scottish Journal of Political Economy, [s. l.], v. 63, n. 1, p. 66–88, 2016. DOI 10.1111/sjpe.12111. Disponível em: https://discovery.ebsco.com/linkprocessor/plink?id=d8e6f0fd-7046-35bc-8b8e-f11bd0df9af7. Acesso em: 13 maio. 2023.
.