Plenaries
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In 2008, economies worldwide slowed as credit tightened and international trade declined. The recent economic downturn has been called the worst global financial crisis since the Great Depression by many economists, arguably even worse than the great depression itself. It saw the wealth of nations, firms, and consumers decline by trillions of US dollars, leading to the collapse – or near collapse – of what were once thought to be stable key businesses. Few economists were able to foresee the incoming recessions, and the Wharton School at the University of Pennsylvania has tried to examine why economists failed to predict such a large global financial crisis. The cause of the downturn is complex and many theories have been presented, but most agree the bursting point to be the collapse of a global housing bubble, which peaked in 2006, to be the spark that uprooted sub-prime lending policies. The economic downturn saw unprecedented market intervention in the 21st century. Governments and central banks responded with expansionary fiscal policy, monetary policy, and business bailouts in an attempt to set the economy back on course. The International Monetary Fund (IMF) estimates more than one trillion US dollars were lost between January of 2007 and September of 2009 by American and European banks, and expected to rise to over 2.7 trillion US dollars by the end of 2010. The recession hit average consumers as well as banks, with Americans losing almost a quarter of their net worth. Stunted and eventually negative economic growth measured in GDP also led to jumps in unemployment rates across the globe, almost doubling in parts of North America. The effects of both the crisis and the response can still be felt worldwide today.
