| Summary: | ABSTRACT
Given the rapid influence of market globalisation, Subprime crisis has played a leading role in today’s economic downfall. This crisis ranks among the most dreadful economic events that have affected the United States and many other parts of the world, since the Great Depression of the 1930s. Although subprime lending seemed too conducive, for arising as a financial innovation, such financial innovations are all the more risky undertakings when they create new classes of loans and securities.
This paper will investigate the impact that subprime crisis has had on the world economies in general. It will also examine the impact of the crisis on the Indian markets in particular by means of empirical evidence and will finally show the ways and means by which such a crisis could be averted, or manner in which its impact could have been reduced.
The lessons that were learnt from the crisis can be applied in a much more beneficial manner for growth and development issues of emerging economies. Developing countries, in particular, are increasingly relying on foreign capital to achieve faster economic growth.
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