The Expected Problem of Unemployment in Global Economic Slowdown & the Plan to Overcome the Problem.

Chapter 1 1.1 Introduction Global economic slowdown a situation in which GDP growth slows but does not decline. For example, if GDP goes from 5% growth to 3% growth, an economy is experiencing a slowdown (http://financialdictionary.thefreedictionary.com/Economic+Slowdown, 2012). Most analysts do not consider a slowdown to be a recession, as global recession is a decline in a country's gross domestic product (GDP) growth for two or more consecutive quarters of a year, it also preceded by several quarters of slowing down (Global Recession, 2012). Besides, global recession is the result of reduction in the demand of products in the global market (RashmiVerma, 2012). Slower growth in high-income countries is likely to result in weaker but still solid developing country growth – including under a mild U.S. recession scenario. Although financial turmoil has so far proved manageable and the growth in the US hardly recovered, but whatever recovery it had achieved now appears shaky and it remains a serious risk for several vulnerable developing countries (Nambiar, 2012). Based on Kaiser, and Wroughton (2012) IMF warns global economic slowdown deepens. The IMF said the global economic slowdown is worsening as it cut its growth forecasts for the second time since April and warned U.S. and European policymakers that failure to fix their economic ills would prolong the slump (Kaiser, and Wroughton, 2012). Economic problems are no longer confined to Europe and North America as China and India see worrying slump in growth (Fears of global economic slowdown weigh on emerging markets, 2012) This would be a new and worrying development. Unemployment is particularly high during a slowdown and it corresponds directly to a loss in GDP. Besides, productivity tends to fall in the early stages of economic slowdown, and then rises again as weaker firms close and causes the variation in profitability between firms rises sharply (Kaiser, and Wroughton, 2012). The living standards of people