Since the Depression of the 1930s, the U.S. along with major economic agencies has been making their way through the financial crisis from the start of 2007. A lot of businesses failed, banks were forecasted to lose a huge sum or money and unemployment rate reached to its maximum in these years. Not just this, but many families were left homeless as a result of this crisis.
This all occurred not because of a single reason but a lot of factors contributed to it, they played their part and resulted in the downfall of the world economy.
The worldwide financial crisis of 2008 brought about the limitation of worldwide development as well as incited a retreat of globalization from its highs of the past two decades. In the event that the 1990s were the high point for globalization and the period prompting 2008 was the continuation of globalism, the years that took after 2008 were surely spectators to the retreat of the globalization process. The explanation behind this is the coordinated and interconnected worldwide economy was shaken with monetary and budgetary stuns in 2008, which implied that the worldwide stuns delivered a withdrawal of worldwide exchange and global development.
As worldwide and universal exchange supports globalization, any solidity in the volumes of worldwide exchange has a thump on the impact on the worldwide economy and by augmentation the globalization process. For instance, the Baltic Dry Index which is a measure of the overall transportation action fell forcefully and even divided in the period taking after 2008 which shows the degree to which globalization withdrew in the years taking after 2008. Further, as worldwide development loosened and worldwide exchange backed off, nations started to decrease universal exchange and swing to household utilization drove development. Every one of these components had the impact of backing off the procedures of globalization from its highs of the 1990s and the mid-2000s.
“For the second time in seven years, the bursting of a major-asset bubble has inflicted great damage on world financial markets. In both cases–the equity bubble in 2000 and the credit bubble in 2007–central banks were asleep at the switch. The lack of monetary discipline has become a hallmark of unfettered globalization. Central banks have failed to provide a stable underpinning to world financial markets and to an increasingly asset-dependent global economy.”
– Stephen Roach, Morgan Stanley