The financial crisis, which surfaced in the US in September 2008, spread through contagion almost like a forest fire across the world. Its transmission to the real sectors of economies was rapid. Output and employment experienced a sharp contraction. The downturn moved quickly into a recession. It is clear that this Great Recession is the deepest crisis in capitalism since the Great Depression more than 75 years ago. There is, however, an important difference. Developing countries, marginal then, are much more significant in the world economy now.
It is just about 21 months, not quite two years, since the crisis surfaced. And the outcomes provide a real surprise. Indeed, not many would have predicted the story that has unfolded.
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