The global recession

IMF research economist Prakash Loungani reports some statistics on the extent to which housing price declines are being seen worldwide.

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The house price decline during 2008 has actually been more modest in the U.S. than in countries such as Denmark, New Zealand, the U.K., and Spain, though the price decline has been going on for much longer in the U.S. and it is the cumulative decline from the price peak that is the key determinant of the extent of mortgage defaults. Loungani notes from previous international and U.S. regional experience that the bigger the real estate price decline, the more severe the economic downturn we might expect.

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The Wall Street Journal also has some neat interactive graphics on international movements in stock prices and exchange rates.


Originally published at Econbrowser on Oct 14, 2008 and reproduced here with the author’s permission.

6 Responses to "The global recession"

  1. Guest   October 15, 2008 at 6:52 pm

    Wait until we get the Obama-Osama tax increases. Then we will have a real depression.

  2. Anonymous   October 15, 2008 at 6:53 pm

    Wait until we get the Obama-Osama tax increases. Then we will have a real depression.

  3. Guest   October 16, 2008 at 1:22 am

    There is no point in trying to lend to broke consumers.So the banks won’t be doing much business.The infrastructure of profligacy is imploding.

  4. Guest   October 16, 2008 at 6:44 am

    either candidate will have a real mess on their hands. Heres a thought why with all this are we allowing the Defense Department to spend 30 Billion to implement the Base closures (its like playing musical chairs with bases). I know in the grand scheme 30 billion is not alot but every billion saved helps. this is all a result of 8 years of the Republicans neglecting domestic issues, and now the only Democrat we could pick is a closet socialist – great country.

  5. dr david hill   October 16, 2008 at 2:41 pm

    With total world debt being well in excess of $100 trillion (personal, corporate, institutional and government) now and the US’s and UK’s total debt hovering towards $53 trillion and 3-times GDP respectfully, there is no wonder that we are at the start of a global recession. With such colossal figures of debt, amassed significantly over the last ¼ century and in total being between two and three years of total global economic output, we have many years to come of austerity and economic downturn to look forward to. Even worst is if we borrow even more like our politicians are doing and where we eventually end up like Zimbabwe, with hunger, lawlessness and socio-economic collapse? For the root problem is debt and common sense dictates that if we continue to borrow and borrow, eventually money becomes worthless. Therefore our politicians would be better using their time, efforts and power to start afresh and accept that the next decade is a period of fundamental change in how the development of the world proceeds. If not, they will definitely oversee the destruction of far more of what we see today than the 10-years of pain required to re-engineering the world order and crucial sustainable change. Indeed, in twenty-five years time if we do not change our development processes (capitalism, super-capitalism, globalization et al), we will look back and see that the financial crisis was just a mere storm in a teacup in comparison to what problems we shall have in 2033. The vision is of nightmarish proportions with substantially dwindling natural resources to sustain human life and climate change meeting head on with 8. 5 billion mouths to feed.We have definitely to change for our own good to the economics of sustainability-need and to the preservation of the human experience itselfDr. David HillWorld Innovation Foundation Charity (WIFC)Bern, Switzerland

  6. Eve   October 17, 2008 at 3:50 am

    Why dont you screen comments? I read your site tolearn more about the financial crisis, not to waste mytime reading some ignorant politcail comment linking the moderately liberal, law-abiding,Christian familyman BArack Obama with the terrorist Bin Laden??