The world is still recovering from the most recent global recession—dubbed the Great Recession because of its scale and global reach— and the likelihood of another downturn has never left the news as the world economy remains under the long shadow of a persistently weak recovery. The bankruptcy of Lehman Brothers, one of the largest U.S. investment banks, in 2008, pushed the world economy and financial system to the brink of collapse and the resulting recession had dire and extreme consequences.
What began in the subprime mortgage market in the United States spiraled into a series of interlinked global events that scythed through the international financial and corporate sectors, slashed stock values and household wealth, made millions unemployed and triggered a huge rise in the debt of nations. Growing financial worries triggered a well-documented decline in the birth rate during and immediately after the 2008-9 recession in the United States, where vasectomy and suicide rates rose.
The 2009 recession ricocheted through Europe, left continued scars on the Japanese economy, and has also caused subsequent downturns in emerging market economies. The developing world has paid too with the subsequent sharp decline in commodity prices. A significant side effect has been the continued increase in inequality, particularly in advanced economies, where the wealthiest have advanced and middle classes stagnated.
But, despite the huge scale of the crisis, what’s clear is that we don’t really fully understand what triggers a global recession and how we can successfully stimulate a lasting recovery.
This book tracks the global business cycle through the destruction of a global recession to the uptick of recovery, drawing on four major episodes in the past half century, in 1975, 1982, 1991, and 2009. It defines key terms, document the main features of a recession and recovery, and describe the events that take place around these episodes.
Authors Ayhan Kose, now a leading economist at the World Bank, and Marco Terrones, a prominent researcher at the IMF, put the latest global recession and ongoing recovery in perspective and make a valuable contribution to the expanding literature on business cycles.
A companion website and DVD provide several unique tools to help readers understand the basics: interactive timelines of the four episodes, videos of author interviews explaining the context, several reports looking at the regional impact of the collapse, as well as coverage of the Lehman Brothers bankruptcy, and a commentary by Larry Summers.
As Nicholas Bloom, Professor of Economics at Stanford University, remarks: “Finally, a clear and insightful guide to global recessions and recoveries. And just in time, with the world trying to recover from its worst economic beating since the Great Depression. This book, written by two leading economists operating in the heart of Washington, will become the bible on global growth and collapse.”
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"This is a landmark book that will have a profound influence on how scholars and policy economists think about booms and busts for many years to come. Pioneers in the field of analyzing and defining global recessions, Kose and Terrones argue that it no longer makes any sense to analyze national downturns as if they always occur in isolation. Particularly interesting and original is their emphasis on the asynchronous nature of recoveries. After 2009, for example, advanced economies experienced their slowest post-war recovery, yet for several years emerging markets experienced their fastest. Kose and Terrones analysis underscores why one needs to think differently about recessions and recoveries in today s globalized world" - Kenneth Rogoff, Thomas D. Cabot Professor of Public Policy and Professor of Economics, Harvard University.
"This is super cool stuff!” Ugo Panizza, Pictet Chair in Finance and Development, The Graduate Institute, Geneva
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