This refers to ‘And now, de-globalisation’, by TN Ninan, February 21, 2009. The concept of globalisation, though in retreat for the moment, will stage a comeback in a matter of years, if not months, for the simple reason that globalisation resulted in great prosperity. Aided by global mobility, the specialisation made possible by technology and human skills brought down the cost of goods and services. Trade was facilitated by global financing, savings were transferred from one country to another, and great employment also resulted. Thus, globalisation ensured adequate GDP growth in all countries and constant employment opportunities.
The effect of the crisis will be a reduction in the production capacities which may lead to a shortage of commodities and inflation in the medium term. When inflation starts rising again, it will spur production capacities and facilitate trade and employment opportunities, once again leading to a boom. We may then start appreciating the effects of inflation as a growth stimulus.
P Esakki Muthu, Mumbai
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