John Edmundson and Philip Ferguson
In late 2006. IMF chief economist Raghuram Rajan declared, “The global economic expansion has been stronger in this period than at any time since the early 1970s.” Yet barely a year later, media reports are regularly speculating about upcoming economic disasters.
Recent economic woes in the United States have impacted on the global economy, as the US remains by far the largest economy in the world. However, problems in the United States – of which the state of subprime mortgages is a classic case (see below) – indicate deeper problems in the world economy.