Global Recession
Categories: Econ, International
Everybody’s thinking it, but nobody’s saying it: global recession. While our modern-day, hyper-connected world is great (Google at your fingertips to help you research companies and find slow-mo puppy videos, mangoes from halfway around the world at the grocery store, the works), it also sets the world up for more risk. If one country’s stock market crashes, inevitably that will have a negative effect on everyone else too...especially the world’s leading markets.
A global recession is a recession that slows the economy of the whole world down (or, at least, many countries around the world). In technical terms, the IMF would measure a global recession by a fall in annual GDP per capita, and by the seven macroeconomic indicators: industrial production levels, trade, capital flow, oil consumption, unemployment rate, per-capita investment, and per-capita consumption. When the wheels of the economy start slowing, so do production, consumption, investment, and employment. That being said, measuring a global recession is no easy (or straightforward) task.
Officially, there’ve been four global recessions since WWII, with the latest one being in 2009 from the subprime mortgage crisis bubble, which burst in late 2007/early 2008.
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Finance: What is Recession?15 Views
finance a la shmoop what is recession well here's one here's another and
another and well here's an economic recession so technically when GDP [Set of teeth appear]
declines for two sequential quarters that is a recession and you can glean
enough from this most excellent chart that in most years GDP grows not
massively but relatively steadily and with compounding the US has grown GDP
from a trickle to a torrent in a recession economic activity declines [Recession definition appears]
maybe a half a percent a percent maybe two percent and you might not think
that's a big deal but we're a nation living on credit that is plastic these [Man using credit card]
things mortgages car loans bunch of other credit II kind of things so a
decline of even 1% when we were expecting growth of two is a delta of 3%
and that change is exacerbated with leverage when people fear for their job
safety they stop buying those extra pairs of earrings at the mall they get [Woman biting her nails]
one less tattoo and they stop making appointments at Botox Depot so all of
the sudden activity in given quote luxury sectors or otherwise unquote just [Person receiving a tattoo]
stops dead and there's a multiplier effect here as well because a wealthy
banker who used to throw 20 parties a year now only throws four so all those [Calendar displaying party days appears]
bartenders and oboe players and ice sculptors yeah they're all out of work
as well and then they buy less beer and that new ice pick the sculptor was gonna
buy yeah well she'll just sharpen her own and make do with it you know until
the GDP grows again after the recession is over in a few years so yeah [Boom/bust cycle appears]
recessions they're dangerous and credit high credit makes them all the more
dangerous so be wary