Beyond the 2008 Global Financial Crisis

Abstract

This chapter reports activities after 2010, the period regarded as the aftermath of the 2008 global financial crisis formally announced to be over at the end of 2009 (Kehoe 2010; OECD 2010). Although some European countries were still in sovereign debt trouble after 2010 (Greece requested another bailout in early 2012 and Spain asked for external financial assistance in June 2012), we use 2010 as a cutoff point in order to be consistent with the reports of other country clusters in this booklet series. From the statistics introduced in Chap. 3, the situations of these five countries have rebounded under the support of each individual country’s stimulus efforts and the gradual revival of global demands.

As of mid-2012, these five advanced countries have largely recovered from the financial crisis, with the USA having a modest recovery. However, with the countries’ aggressive stimulus packages, all five have heightened government debt, with Japan’s debt, in particular, reaching almost 200 % of its gross domestic product (GDP) and the USA’s debt approaching 100 % of its GDP in 2010 (Fig. 2.2). In addition, New Zealand and the USA left the financial crisis with high unemployment rates of 6.80 and 9.63 % in 2010 (Fig. 2.3) and 6 and 8.2 % (Global Finance 2013a) in 2012, respectively. The International Monetary Fund (IMF) was pessimistic about the world economy and cut its forecast for global economic growth for 2012 to 3.3 from 4 %, because of the likelihood of a mild recession in Europe (Kuroda 2012). The world economy continues to unfold during the drafting of this volume. Some more current developments concerning these five advanced countries will be introduced in the next chapter.

In what follows, in the sequence of Australia, Canada, Japan, New Zealand, and the USA, we briefly describe what had happened in each individual country after 2010.