Professor Gerard Adams of University of Pennsylvania in his presentation on Financial Crisis and Global Economy on Wednesday said that high inflation is still a major challenge the global economy is comforting.[break]
Speaking at the program organized by capital-based think-tank Institute for Policy Research and Development (IPRAD), he said that quick policy response from all major global economies prevented the financial crisis from turning into a catastrophe seen during 1930s great depression.
The quick response made through American Recovery and Reinvestment Act as per which the US government brought a huge $787 billion of stimulus package drastically reduced the impact period, which otherwise could have been much longer, he said.
However, Professor Adams was quick to add that lack of investment demand, new emerged sovereign debt problems as seen in Greece, undervalued currency like the Chinese currency and not fully repaired financial regulation system are some of the factors that still need extra attention.
Answering quires raised at the program, he stressed that countries like Nepal make extra efforts to attract Foreign Direct Investment (FDI) along with mobilization of foreign aid to deal with the problems like huge Balance of Payment deficits.
Speaking at the same program, chairman of IPRAD Dr Dilli Raj Khanal said that financial crisis has showed that neither the western-style economic policy nor the traditional social economic system is perfect in dealing with the crisis. We are in need of a policy that cares poorer section and encourage entrepreneurship, he said.
Professor Madan Kumar Dahal said the crisis will be seen in the economy for a long time despite the recent recoveries seen in the global economy.
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