The Global Financial Crisis

This chapter examines the resilience to the global financial crisis based on experiences of the Indian economy. By assessing commonly used measures such as gross domestic product (GDP) growth rate; unemployment rate; fall in property values; value destruction of financial assets; current account deficits; and the failure of institutions, corporations, and banks, the discussion considers the relatively high resilience of the Indian economy as compared to those of the United States and Europe. Some lessons on economic resilience include high savings rate and lower credit exposure, a strong regulatory framework and an effective central bank responsible for monetary policy, policy emphasis on stability rather than growth, and lowering of economic dependence on exports.