Long-Term Consequences of the Great Recession

The world economy appears to be on a slow road to recovery, yet the scarring, especially outside of the United States is set to remain. Laurence Chandy and Geoffrey Gertz both of the Brookings Institution have written a paper on the "new normal" -- economic growth projected by the IMF in the 2011-2015 period of nominal recovery. For the vast majority of countries, growth during this nominal recovery will be much less robust than it was in the five years immediately before the crisis (2003-2007). In many countries, including the United States a slight slowdown was predicted even before the recession: the 2003-2007 period of growth was partially driven by unsustainable booms in finance and construction and cheap money. Still the recession pushed down growth further still. With few exceptions the IMF projects lower per capita GDP in 2013 than they did in 2007. While the recession will cause scaring worldwide, Eastern Europe will likely suffer the most for several years into the future.
SSDAN Office

No comments :

Post a Comment