The Great Recession was a period of marked general decline observed in national economies globally during the late 2000s. The severity and timing of the recession varied from country to country. At the time, the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression.
The causes of the Great Recession include a combination of vulnerabilities that developed in the financial system, along with a series of triggering events that began with the bursting of the United States housing bubble in 2005–2006 and the subprime mortgage crisis in 2007–2008 when housing prices fell and homeowners began to walk away from their mortgages, the value of mortgage-backed securities held by investment banks declined, causing several to collapse or be bailed out in September 2008. The combination of banks unable to provide funds to businesses, and homeowners paying down debt rather than borrowing and spending, resulted in the Great Recession that began in the U.S. officially in December 2007 and lasted until June 2009. As with most of other recessions, it appears that no known formal theoretical or empirical model was able to accurately predict the advance of this recession, except for minor signals in the sudden rise of forecasted probabilities, which were still well under 50%.
The recession was not felt equally around the world; whereas most of the world's developed economies, particularly in North America, South America and Europe, fell into a severe, sustained recession, many more recently developed economies, particularly China, India and Poland, suffered far less impact, as their economies grew substantially during this period – similarly, the highly developed country of Australia was unaffected, having experienced uninterrupted growth since the early 1990s
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