Recessions Hinder Growth!
Recessions might cause extensive damage to the global economy. There is an imminent need to identify key risk factors that might contribute to economic recession and fix them, early.
Major Contributing Factors!
Economists argue that the most important causes that might contribute to recession include the following trends and developments.
Excessive Credit Creation!
It is argued that whenever banks make loans and advances, money is created. Economists are of the opinion that excessive credit creation beyond the reasonable demand and needs results in higher level of debts in the economy.
Speculation in Financial Markets!
The next important factor that causes an inexplicable rise in financial markets includes speculative dealings and investments. According to a statistical report, not even one-twelfth of the money created by the banks went to brick-and-mortar type of business ventures. Such unregulated activities caused recession in many economies.
Another adverse move by banks and financial institutions was that they overly focused on lending to the property market which resulted in an irrational upward rise in asset prices. But, like a bubble, these prices started falling down and added to an increase in non-performing loans (NPL). Since many who borrowed from the banks could not repay their loans to the banking and financial institutions, inevitably, went bankrupt.
A research report published in February 2013, by the Financial Services Authority (FSA) argued that creation of private credit and money contributed to the adverse consequences.
Tight Lending Added to the Woes!
‘Once Bitten! Twice Shy!! is a proverb. During the global credit crisis (2008), banks have learned hard lessons as the level of NPLs(Non-Performing Loans) soared, quite dangerously. Disguising themselves as being cautious, banks have tightened their lending policies. With the result, businesses could not raise the much-needed capital for their activities and ventures. Of course, this phenomenon contributed to recession as cashflow was not happening. One of the reports published by the Bank of England argues as follows. ……, ‘Just as taking out a new loan created money, the repayment of bank loans destroyed money’ (Money Creation in the Modern Economy, Bank of England p-3-4).
Improving the business confidence and investments is quite necessary create jobs in an economy. Aggregate demand for goods and services should be improved as it would help continuity of employment and sustainability in business. Business practices or activities that might cause contagion should be discouraged, at any cost.
Against this backdrop, this conference in Paris, France aims at achieving the following objectives:
a) Closely examine the major factors that contribute to recession and undertake research activities to arrest them, at an early stage;
b) Encouraging active and socially relevant research works on the above crucial issues and come up with meaningful solutions to help economic activities to accelerate and create sustainable employment opportunities and economic growth, in the long run;
c) Provide an ideal platform for researchers, economists, bankers and practitioners to network and share their research and practical experiences to develop models and systems for addressing recession-related issues;
d) Offer suitable solutions so that the world becomes a better place for the humanity to lead a cohesive and normal life.
Web site :
Files: Event brochure, conference program, call for papers, abstracts etc.