San José State University
Department of Economics
Thayer Watkins
Silicon Valley
& Tornado Alley

The Global Course of Recovery
from the 2008-2009 Recession

What are presented below are displays of how a selection of countries have been faring in the recent past. These displays were created from the National Accounts statistics compiled by the International Monetary Fund (IMF). Other sources of statistics are available, but the IMF statistics were used to ensure some commonality in the data.

The statistical tabulations cover the period from the first quarter of 2009 (2009I) to the second quarter of 2010 (2010II) for some countries. The first quarter of 2009 is used as a quarter before the starting point of the recoveries. Recovery here means strictly the recovery of real GDP. The economies of the countries typically are remaining in an economic malaise with high unemployment even though real GDP is again increasing.

In order to show the course of the recovery in greater precision what is plotted is the percentage change in real Gross Domestic Product (GDP) from the third quarter of 2009. Since the recession started as a result of misguided economic policies in the U.S. the first graph will include the U.S. It also includes Japan and the United Kingdom (U.K.).

Japan was harder hit by the recession than the U.S. but Japan's recovery in real GDP started a quarter before the U.S.'s production recovery began. The production recovery for the United Kingdom (UK) began one quarter after that of the U.S. According to the IMF statistics the production recovery has been stronger for the U.S. than it has been for either Japan or the U.K.

The Courses of the Production Recoveries for
Some of the Economies of Western Europe

The countries of Germany, France, Italy and Spain are all part of the European Monetary Union. The courses of the recoveries for these four countries are shown below.

Germany is recovering most strongly and Spain is not recovering at all as of 2010II.

The Impact of the Recession on Some of
the Relatively Smaller Economies

It is worthwhile to look at the recoveries of some of the smaller economies. They were more strongly affected by the recession than was the U.S. It was a case of the old saying that, "When the U.S. comes down with a cold, the rest of the world experiences pneumonia."

First consider the economy of Portugal. If Spain is having a difficult time achieving recovery then Portugal is likely experiencing the same condition or worse. The graph below shows what happened to Portugal in comparison to the much larger economy of Spain.

While Spain is not recovering as of 2010III, it is maintaining its level of real GDP. Portugal is not only not recovering it is still experiencing declines in production. Again it is the case of the smaller economy being more strongly affected.

A comparison similar to that of Portugal and Spain is that of Belgium and the Netherlands.

The statistics for the Belgian economy are wildly volatile. The figure for 2010II is a 19.6% increase over 2009II.

Some of the Other Economies

The economies of Canada and the United States are strongly linked together. Their economies would be expected to follow a parallel course. The graph below shows that this is true.

The economy of Mexico is also now strongly linked to that of the U.S. but it has experienced more volatile swings in its production, as is shown below.

The effect of the global recession on Mexico was delayed but when it hit it was severe. Canada, on the other hand, experienced the U.S. recession in almost the same pattern as the U.S.

The Chilean economy has become dependent upon its exports to the United States, but the statistics however do not show much correlation in the output of Chile with that of the U.S.

The IMF statistics for the GDP's most of the Latin American economies are not sufficiently up-to-date enough to the course of their recoveries. The graph Colombia is shown below.

Argentina, as always, is volatile and enigmatic. No one ever knows where Argentina is going.

Australia is the exemplary case. Its economy began to grow in 2008IV and has grown steadily since then.

In contrast India experienced a high rate of recovery then a minor collapse.

The IMF does not have real GDP statistics for China, but the current value GDP figures are worth viewing.

As can be seen above China has experienced some fluctuations in production. It has not been continuous growth at 9 or 10 percent per year.

An economy which might be expected to follow the same pattern as Japan is South Korea. Instead the South Korean economy has been much more erratic than the Japanese.

South Korea was one of the original Asian Tiger economies. Another of those is Singapore. Singapore was unaffected in the early quarters of the recession but when it was affected it was severely affected. The Singaporean economy went through a major recession but is now strongly recovered.

Malaysia could be considered one of the Asian Tiger economies. It too was little affected by the recession in the early quarters but then when it was affected it was severely affected. Now however Malaysia, despite a minor setback in 2010I, seems to be fully recovered.

The Odd Cases

The data for India is shows that India went through a short severe recession from which it recovered only to be affected by the global recession. The short recession starting in 2008I was probably due to something other than the U.S. recession.

Brazil presents an interesting case; rapid recovery and then stagnation.

In contrast, the economy of Israel has gone through some erratic fluctuations but with the general trend being positive.

On the other hand, there are some small economies that are still facing uncertain times. For example, consider the case of Lithuania.

The Swedish economy has had some sharp fluctuations in its real GDP. However its recovery seems to be decidedly precarious.

Denmark is another Social Democratic economy whose course of recovery is uncertain.

The survey would not be complete without the statistics for Iceland. As a result of the financial turmoil Iceland experienced a severe financial crisis. The consequences in terms of production could be different than the pattern developing in its financial markets. The economic pattern for Iceland is quite interesting.

The graph shows that Iceland was experiencing a recession before the financial crisis and recession in the U.S. The U.S. recession added to the economic woes of Iceland but was not the source of its economic decline. The Icelandic economy is still suffering very severely.

The picture is one of decline followed by stimulus followed by the exhaustion of the effect of the stimulus.

(To be continued.)

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