Saturday, January 18, 2014

Interview with Singapore's finance minister on Singapore's economy during the 2008 global financial crisis

The 2008 global financial crisis was one of the worst crisis after the great depression. Singapore's economy was also hit with a contraction of -6% to -9% in 2009. Resident unemployment rate was at 4.3% in 2009.

Economic policies have changed over the years from the pre great depression era to the post 2008 global financial crisis era. In my current year 3 economics module in university, I'll be learning all the different economics school of thoughts from pre 1900s to post 2008. This is rather interesting to me as I can learn what caused the various crisis some to be more severe than the others and what was done to bring the economy out of the recession.

The great depression was so great that it was said to be one of the causes of world war 1 and 2. It was debated that had the governments back then implemented the right policies to bring the economy out of depression, the two world wars would not have happened. After the two world wars, we experienced one of the greatest economic booms in history. The new economic school of thought, which was known as the Keynesian economics, brought the world out of crisis and into economic prosperity.

It was until in 1979 where the oil crisis took place that brought the economy down again. This crisis was caused by shocks to the supply of oil and was different from all the past crisis. Governments used the old economic policies to try and bring the economy back to recovery again but this time it caused other problems. Inflation was born out of the oil crisis causing prices worldwide to accelerate. Hyperinflation was seen in some countries This was partly caused by the wrong policies that was implemented after the 1979 oil crisis.

The 2008 global financial crisis is something new again. This time it is global and the crisis is seen in almost every part of the world. There is already new research on going currently, which is known as the post Keynesian economic school of thought. This is still rather new and it'll be interesting to watch the developments of that theory. Having said all these, one have to realise that economic policies are one of the most important factors to a country. Without stable policies, the country will always be in trouble with high inflation and also high unemployment.

There's this video which was broadcast shortly after the 2008 financial crisis. The video consist of interviews with people who were affected by the crisis and also an interview with Singapore's finance minister. The interview talks about the various policies the government will embark on and how to bring Singapore out of the crisis itself. It is definitely not by chance that we could still be here today after the crisis.

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