ABSTRACT
The world economy is more interdependent now than ever before due to the process of liberalization and globalization in the world economy. As a result, any economic disturbance in one country/ a group of countries is transmitted very quickly to the rest of the world economy. The current fi nancial crisis that originated mainly from developed economies is no exception. The only caveat is that the impact is not uniform across the countries and varies according to the structure of their foreign trade, fi nancial markets, and institutions to cope up with such crisis. In this chapter, we examine the impact of the crisis on the migrant labour market in the oil exporting economy of Kuwait. Before undertaking the analysis of the impact on migrant labour, we have provided a brief account of the performance of the economy at the aggregate and the disaggregate level. In order to place issues in the right perspective, we have examined a fi ve-sector macroeconomic model of the economy with emphasis on the effect of oil exports on national income (Gross Domestic Product [GDP] in constant prices) and cost of living index. The macroeconomic impact is then linked to the migrant labour market for the recession in the world economy.
