2025-02-06
Since the global financial crisis of 2007/2008, many econometrists have warned about a repition of
such events. In fact, global financial crises seem to occur roughly once every decade. When looking at
the biggest global crises of the last 50 years, we get following list, which reinforces the claim:
This is roughly one crisis every 9.4 years. If we look at the global annual GDP growth in % from
World Bank Group,
we can see strong correlation between above crises dates and global GDP growth plunge. The data is plotted
in following figure:
Fig. 1.1 - Global annual GDP growth in % from 1961 to 2023.
The figure is plotted with annual global GDP growth in percentage on the y-axis and the years from
1961 to 2023 on the x-axis. When inspecting the curve, we see the lowest valleys in the years 1975,
1982, 1991, 2001, 2009, and 2020 with the values 0.56, 0.36, 1.21, 2.03, -1.34, and -2.88, respectively.
An interesting observation from above plot is that seemingly, over time, financial crises are increasing
in impact.
More to follow...
