What is a global recession?

Global recession is an economic recession that occurs on a global scale. They can be more easily found in modern times, as the economies of most countries are interdependent. According to the International Monetary Fund (IMF), total global economic growth is less than 3% of the global recession. Due to globalization, domestic economic recessions can spread to other countries. For example, the recession at the end of 2000 began in the United States and spread to many other industrial nations.

The International Monetary Fund was founded after World War II to supervise global economic cooperation and provide loans to countries that have financial problems. He still plays a leading role in global economic matters. It is difficult to define the economic recession, but the IMF has been using a specific definition for years: the global recession means global growth of less than 3%. Global economic growth can be measured simply by the fact that quite gross Rejtice Products in all countries.

From why the positive growth rate is worrying is double. First, positive absolute growth can mean negative growth per population if the population increases sufficiently. Secondly, it is rare that developing market economies - such as the economies of many poor countries - reports low growth statistics. Therefore, the positive growth of these developing economies can overshadow the negative growth of multiple industrial economies.

Global recession is more likely in the modern world than in the past. Now there is a "global" economy in which national borders often do not affect trade. American economist Thomas Friedman has defined globalization as the integration of finance, markets, nation countries and technology within the free market system. It is this globalization that can bring the local recession to Global Scale.

For this reason, the global recession usually does not emerge for many independent causes. Rather, its origin č can beasto to trace to a certain time and place in the world. This is the case of the end-2000S recession.

In 2007, there was a crisis in the US banking system that threatened to collapse many major financial institutions. The US government responded by rescue banks with low interest loans and took further measures. This was followed by similar crises and responses around the world. Another result was a decline in global stock prices and general economic slowdown. Due to its global scale, the recession of the end of 2000 is often considered to be the worst economic crisis since great depression.