The global economy and the Great Recession

The 2008 financial crisis that triggered the Great Recession was the worst economic crisis since the Great Depression. The economy rebounded after 2008. Global governing institutions prevented another depression. Global governing institutions increased coordination and cooperation, maintained liquidity and capital flows, implemented lasting regulatory changes and kept global markets open; all of which helped to maintain the liberal economic order in the face of a financial crisis worse than the Great Depression. Social measures such as global poverty also improved despite the Great Recession, in large part because poorer countries had access to global markets. Policymakers working within global governing institutions looked back at the experience of the Great Depression and took deliberate steps to avoid a repeat. The chapter introduces the Great Recession and compares how Political Economy (PE) and International Political Economy scholars make sense of the recession. It discusses how PE scholars think about the recession and the financial crisis that triggered it.