Regulation and Policy in the Global Recession

The forecast of the International Monetary Fund (IMF) in April 2009 is for world output declining by 1.3 percent in 2009, bouncing by 1.9 percent in 2010 after growing by 5.2 percent in 2007, and 3.2 percent in 2008.491 Output in advanced countries is forecast to decline by 3.8 percent in 2009, growing by 0 percent in 2010. US output would decline by 2.8 percent in 2009, growing by 0 percent in 2010. The volume of world trade of goods and services is forecast to decline by 11 percent in 2009, bouncing by 0.6 percent in 2010 after growing by 7.2 percent in 2007 and by 3.3 percent in 2008. Recession in the form of contraction of output or sharp reduction in the rate of growth affects the entire world. The first section below reviews the experience and analysis of the Great Depression and the New Deal. The critical issue for the regulatory agenda is what caused the credit crisis and resulting global recession. Several sections analyze the monetary and fiscal policies. Bank nationalization is an important issue in regulatory debate. The final section outlines the heavy regulatory agenda.