keynesian economics.

Thw world economy has tumbled upon yet another recession in less than 6 years. The downslide which started in the US in dec ,07 has spread to several countries of Europe and Japan. The emerging economies of China and India have also been impacted for no fault of theirs. It has resulted in loss of jobs in almost all industry verticals due to weakening of aggregate demand. It is expected that situations will improve by the end of this year with the return of normalcy in the growth rates.
Pessimists have compared it with spectre of early thirties,predicting a decade of stagnant growth. However, such a scenario is highly improbable given the magnitude of efforts by the central banks all over the world to contain the fallout of this recession. We may see huge increase in public spending in an attempt by world governments to provide counter cyclical measures as prescribed by Keynes. However,such efforts need to be coordinated across the globe to create huge multiplier effects to enable the world economy to get out of this recession.
This crisis has led to scathing attack on the ideals of capitalism ,raising of question regarding the ability of the system to ensure holistic development of our economy. However,in the absence of any viable alternative,we may continue to follow the capitalistic model of development which has resulted in rapid economic development of western world inspite of its shortcomings. However, recessions have got some clensing effects as they help us to get rid of our past excesses reminding us that life is not full of rosses.