Working Paper: CEPR ID: DP14397
Authors: Ayhan Kose; Naotaka Sugawara; Marco E. Terrones
Abstract: The world economy has experienced four global recessions over the past seven decades: in 1975, 1982, 1991, and 2009. During each of these episodes, annual real per capita global GDP contracted, and this contraction was accompanied by weakening of other key indicators of global economic activity. The global recessions were highly synchronized internationally, with severe economic and financial disruptions in many countries around the world. The 2009 global recession, set off by the global financial crisis, was by far the deepest and most synchronized of the four recessions. As the epicenter of the crisis, advanced economies felt the brunt of the recession. The subsequent expansion has been the weakest in the post-war period in advanced economies as many of them have struggled to overcome the legacies of the crisis. In contrast, most emerging market and developing economies weathered the 2009 global recession relatively well and delivered a stronger recovery than after previous global recessions.
Keywords: global economy; global expansion; global recovery; synchronization of cycles; financial markets; real activity
JEL Codes: E32; F44; N10; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Global recession (F44) | contraction in annual real per capita global GDP (F62) |
| Decline in global GDP (F69) | declines in industrial production (L16) |
| Decline in global GDP (F69) | declines in trade (F19) |
| Decline in global GDP (F69) | declines in capital flows (F32) |
| Decline in global GDP (F69) | declines in oil consumption (Q31) |
| Decline in global GDP (F69) | declines in employment (J63) |
| 2009 global recession (F65) | advanced economies experiencing severe impacts (F69) |
| 2009 global recession (F65) | EMDEs maintaining positive growth (O53) |
| Global recession (F44) | downward spiral in economic activity (E32) |