Global Recession

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Definition of 'Global Recession'

A global recession is a significant decline in economic activity that is felt around the world. It is typically characterized by a drop in output, investment, and employment. Global recessions can have a number of causes, including financial crises, natural disasters, and wars.

The most recent global recession occurred in 2008-2009. It was triggered by the collapse of the subprime mortgage market in the United States. The subprime mortgage market is a market for mortgages that are made to borrowers with poor credit histories. These mortgages are often characterized by high interest rates and fees. The collapse of the subprime mortgage market led to a wave of foreclosures, which in turn led to a decline in lending and investment. The global recession caused a significant loss of output and employment, and it had a negative impact on economic growth around the world.

The effects of a global recession can be far-reaching. In addition to the direct impact on output and employment, global recessions can also lead to a decline in consumer confidence, a drop in asset prices, and an increase in government debt. The global recession of 2008-2009 had a number of long-term consequences, including the European debt crisis and the rise of populism in the United States.

There is no single way to prevent a global recession. However, there are a number of steps that can be taken to reduce the risk of a global recession, including:

* Strengthening financial regulation
* Promoting financial stability
* Ensuring that banks have sufficient capital
* Promoting international cooperation

By taking these steps, we can help to reduce the risk of a global recession and its negative impact on the world economy.

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