Healthy world trade , a sine-quo-non for global economies

The 2008 global downturn is rewriting our economic expertise  in the realm of monetary and fiscal policies. While individual nations would gladly tap into the advantages provided by  globalisation ,they show reluctance to share common problems of a unified economy.  They do not factor in; the time needed for economic recovery after a financial crisis; underestimation of the the size of output loss owing to primordial concepts of  "fiscal austerity " and  worst of all, the the tendency for countries to drag each other down as their economies contract. When a country’s economic growth slows, it imports less from other countries, thereby reducing growth rates, and  to reduced imports.Global trade has steadily weakened,  almost  stagnant in the last six months. The popular  theory  that exports would provide an escape route from the crisis has failed , as economic growth  stalled with falling import demand from trade partners .The eurozone  is an example, where countries trade extensively with each other and the rest of the world Their slowdowns have significantly  decreased global trade, undermining global growth. In good times, the trade generated by a country’s growth bolsters global growth. But, in times of crisis, the trade spillovers have the opposite effect. While seemingly less ominous  than financial contagion, trade imbalances profoundly influence global growth prospects.  Sadly, policy errors and delays in individual countries  are likely cause greater damage globally, than hitherto understood ,to every economy.
 (published Fin. Express  Apr 26)