The financial crisis of 2007-2008 was the worst crisis since the Great Depression of the 1930s, which rendered 8.8 million people jobless the United States alone, while its repercussions were felt worldwide. And if words are not enough to understand how badly it hurt the advanced countries — the United States, the United Kingdom, Hong Kong and Germany, and one chart is enough to visualise the impact.
Advanced economies’ GDP growth rate tanked into the negative zone between 2008 and 2010, while India and China showed resilience. Even as the crisis began with the subprime mortgage market crash in the United States, the country’s GDP growth did not tank as much as others. Among the developed countries Germany felt the brunt maximum, followed by the UK. Hong Kong’s GDP growth too witnessed a sharp fall.
Moreover, it’s not even been 10 years since the crisis, many economists are already predicting another one as investors are “all but fearful”, in Warren Buffett words. Microsoft’s Bill Gates too said that a 2008-like crash is a certainty. Prominent economist and the University of Chicago Professor Douglas Diamond explained it further. He observed in his research that “credit, or liquidity, was once again being granted too liberally” as before the 2008 crisis.