Now with the US slowdown spreading across the globe coupled with a declining dollar, advocates of the decoupling theory are debunking their claims.Most Asian markets are now on big recession after the crash of Dow John’s. Indian, Chinese and
The major drawback of Decoupling theory is that it does not consider the multiple economic relationships and globalization trends. Although the trades among Asian countries grown tremendously, the major trading partner for all major Asian countries is still United States and any recession in its economy will lead to recession in all these countries, although the effect may vary.The coupling thus still exists and the same can be said about the near future as well.
Courtesy:1>Dr Salma Rizvi,MBA,PhD,Lecturer(Finance)Amity Business School