The great recession of 2008-2009 : causes, consequences and policy responses
AbstractStarting in mid-2007, the global financial crisis quickly metamorphosed from the bursting of the housing bubble in the US to the worst recession the world has witnessed for over six decades. Through an in-depth review of the crisis in terms of the causes, consequences and policy responses, this paper identifies four key messages. Firstly, contrary to widely-held perceptions during the boom years before the crisis, the paper underscores that the global economy was by no means as stable as suggested, while at the same time the majority of the worldâs poor had benefited insufficiently from stronger economic growth. Secondly, there were complex and interlinked factors behind the emergence of the crisis in 2007, namely loose monetary policy, global imbalances, misperception of risk and lax financial regulation. Thirdly, beyond the aggregate picture of economic collapse and rising unemployment, this paper stresses that the impact of the crisis is rather diverse, reflecting differences in initial conditions, transmission channels and vulnerabilities of economies, along with the role of government policy in mitigating the downturn. Fourthly, while the recovery phase has commenced, a number of risks remain that could derail improvements in economies and hinder efforts to ensure that the recovery is accompanied by job creation. These risks pertain in particular to the challenges of dealing with public debt and continuing global imbalances.
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Bibliographic InfoPaper provided by International Labour Organization in its series ILO Working Papers with number 457693.
Length: 54 pages
Date of creation: 2010
Date of revision:
Publication status: Published in Employment working paper series
economic recession; financial market; economic recovery; economic policy; labour market; employment; labour policy; developed countries; developing countries; récession économique; marché financier; reprise économique; politique économique; marché du travail; emploi; politique du travail; pays développés; pays en développement; recesión económica; mercado financiero; recuperación económica; política económica; mercado de trabajo; empleo; política laboral; países desarrollados; países en desarrollo;
Other versions of this item:
- Verick, Sher & Islam, Iyanatul, 2010. "The Great Recession of 2008-2009: Causes, Consequences and Policy Responses," IZA Discussion Papers 4934, Institute for the Study of Labor (IZA).
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- G01 - Financial Economics - - General - - - Financial Crises
- J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
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