Recession

A recession is a brief period of decreased trade and manufacturing characterized by a decline in

GDP over two consecutive quarters.
According to the IMF, global economic activity is experiencing a sharper-than- expected
slowdown, with inflation higher than seen in several decades.
The world is reeling from shocks in geopolitics, energy and economics due to the the cost-of-
living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and
the lingering COVID-19 pandemic ,all weigh heavily on the outlook.
this economic downturn is unlike any the country has ever seen, There was no boom and bust, no
bubble that burst, no shocking attack on our shores.
Consequently, various factors, such as ugly inflation rates, the decline in economic growth,
increasing unemployment rates, and high-interest rates, point out the possibility of a
recession.

-the World Bank's 2022 prospects show increased chances of a rapid economic and financial
crisis if the global inflation rates continue soaring .
Although inflation has been tackled by applying fiscal and monetary policies, the prices of
commodities might exceed the threshold of the measures that tackle inflation.

-The decline in economic growth can be linked to the aftermath of the Covid-19 pandemic and
the recent Ukraine-Russian war
Almost all economies in the world are experiencing a deceleration in economic growth, which
can be accredited to an economic crisis
Consequently, a deceleration in economic growth with high inflation rates is likely to increase
the rate of the economic crisis across all major economies.

-A high unemployment rate is a product of low economic productivity,Notably, massive job

losses have been experienced following the Covid-19 pandemic
Consequently, low employment rates --> lower economic productivity that affects the trade of
balances, leading to higher chances of a recession.

-In essence, there are increased chances that most sectors that rely on borrowing might close if
the interest rates continue rising. Thus, the closure of such industries will shrink economic
productivity and create an economic crisis.

=>Depressing inflation figures lower incomes and salaries while degrading savings, purchasing
power, and home values. Inflation also lowers purchasing power and the level of savings
Consequently, the detrimental effects of the Covid-19 pandemic and the recent war in Ukraine
led to economic deceleration, increasing the risk of recession

climate change
Climate chocs trigger contagion and spillovers and an economic shock which is a stock market
crash, or liquidity crisis in the banking system to keep on pumping money into the economy
According to IMF, the spillover and the contagion effect can be amplified by two main factors
A mitigation package that entails: (high carbon prices, compensation for households..)
 Subprime crisis :

The United States subprime mortgage crisis can be summed as a set of actions and conditions
that were fundamental attributes of a financial crisis and ensuing recession, which became
evident and visible in 2008.
Some of the actions or factors that contributed to this crisis of rise and fall of housing costs are
attributed to the securities held by the financial institutions.
The huge inflow of foreign funds and low U.S. rates of interest between 2002 and 2004 is
attributed to the volatile milieu characterized by easy credit conditions.

1/ a decline in housing prices before the crisis there was an overvaluation of houses.
2/ Negative equity: the house worth is less than the mortgage
3/ Mass involuntary foreclosure
4/ increased housing supply

This environment is immensely attributed to the housing and credit bubbles.

However, the immediate cause of the subprime crisis was the bursting of the US’s housing
bubble that peaked between 2005 and 2006.
In conclusion, the subprime crisis was a historic economic crisis that the US and other European
nations underwent.
The effects on both the consumers and the homeowners were severe and the overall result was
the US recession.

War Ukraine Russia

The Russia's Invasion of Ukraine is one of the most recent and controversial events in the world.
Since February 24, 2022, these two countries have had no formal diplomatic relations and are
now at war
Each day, the situation there worsens and the bilateral relations between these countries have
gone through phases of ties, tensions, and outright hostility due to Globalization and the
interdependence between countries
The repercussions of the war between Ukraine and Russia has a negative impact on trade across
their national boundaries.
Infrastructure damage, a drop in the working population, inflation, shortages, uncertainty, a rise
in debt, and disruption to normal economic activity are all serious economic costs of war.
-Increased spending on warfare + higher interest rates + higher taxation+ lower GDP per capita +
lower consumption
-agriculture is Ukraine's biggest global export, and as a result of the war's bombing, global prices
for these products are projected to climb.
--->It will also pose a threat to other nations because if they do business or trade with these
countries, they may become involved and have an impact on political and international relations
due to the power these countries have.
-Investment also decreases and inflation increases as a direct consequence of the conflict
-In trade food and fuel price shocks
-On a global scale, conflicts cause a disruption in the supply chain which intern skyrocket