Last Edited October 24, The global financial crisis that began in dragged much of the world economy into recession, and Canada was not spared. Although the effects on Canada were milder than on the United States and in Europe, the Canadian recession of —09 was still severe enough to generate sharp declines in output and employment and to require significant responses by Canadian policy-makers.
The Great Recession of led to a global collapse of international trade flows. Indeed, international trade flows fell 30 percent relative to gross domestic product GDP Eaton et al.
From August through AprilU. The Great Recession, however, affected some U. Because international trade has become increasingly relevant to the U. This essay examines whether a persistent realignment can be observed in the relevance of the different trade partners of the United States since the recession subsided.
We focus on the 11 countries that account for the top destinations of U. We compare the trade of these countries with the United States in with that in The first two charts compare the percentages of U. The Netherlands is the eighth-highest destination for U. These 11 countries accounted for 68 percent of total U.
The charts show that the shares of exports and imports are positively correlated with each other in both and The remarkable exceptions are China and Venezuela, which import much less from the United States than they export to it, and Canada, for which the opposite is true.
The first two charts show no abrupt changes in the U. Indeed, countries that were the major importers exporters in were also the major importers exporters in Moreover, there have been no dramatic changes in the rankings, except for South Korea, which overtook the United Kingdom as a source of U.
Even though no abrupt changes are detected, the third chart shows a consistent shift of U. This chart shows the 11 countries in decreasing order, from left to right, according to their per capita GDP adjusted for purchasing power parity differences.
The chart also shows the change in the shares for the rest of the world i. The two poorest U. The same situation applies to the aggregate shares for the rest of the world. A main factor behind this shift is likely the performance of the different countries during the Great Recession.
The fourth chart shows the and ratios of per capita real income of the 11 countries relative to that of the United States. As expected, the chart shows that the United States is richer than all its trade partners in real terms because all and ratios are below 1.
More interestingly, many of the major trade partners made gains in catching up with the United States, as indicated by the ratios for most countries lying above the degree line in the chart. The chart suggests that per capita income has grown in China and Mexico more than it has in the United States during this period, while the opposite occurred for Japan.
One of the most interesting features of the Great Recession is that—contrary to other global recessions—it was mostly a rich-country phenomenon. As such, it might have accelerated—but not by much—the long-run growth of the relative importance of emerging markets such as China and Mexico in global and U.
However, a country's income growth rate can be only part of the story. Both Canada and Germany outgrew the United States in terms of income during the period, and their trade shares with the United States have declined.
Notes 1 Trade data are from the U. Trade in Goods by Country. However, there are relevant differences for trade in services with respect to the trade in goods.
See Borchert and Matto Borchert, Ingo and Mattoo, Aaditya.The amount of remittances dropped to $25 billion in , the first decline since the Central Bank of Mexico started keeping track 14 years ago.
In the first nine months of , the Bank reports. Economic growth The impact of the Global Financial Crisis on economic growth As a result of the global recession, Australia’s GDP was forecasted to contract by % in in comparison to other advanced economies which were expected to contract by % in the same year.
A burst of optimism sent the FTSE through the mark for the first time in after the NIESR thinktank calculated the recession probably ended in May.
Moody's added to the optimisic. They find that back in November , shortly after the onset of the financial crisis, roughly 13 percent of households were in distress and that this fraction increased rapidly by June to about 17 percent where it has remained.
While in and the United States experienced bank failures, bailouts, and the worst recession since the s, Canada had no bank failures, no bailouts, and its recession was less severe than either that of the early s or early s.
and thus more exposed to local economic conditions. The inherent weakness of the banks led to. The Great Recession December –June These programs included the Economic Stimulus Act of and the American Recovery and Reinvestment Act of and the limited prospects for global growth in and speak to how the aftermath of the Great Recession .