The economy of the world Follow

EVERYONE knows that the financial system took a downward dive in mid-September. The failure of Lehman Brothers turned the rich world’s credit crunch into a global calamity, as the international banking system came close to collapse and even the most basic functions of finance, such as trade credit, seized up. To stop this financial breakdown sending the world economy into a tailspin, politicians scrambled with bank-rescue packages and promises of fiscal stimulus. Unfortunately, it seems increasingly clear that they failed. Just as the financial crisis went global at the end of 2008, so large chunks of the world economy went into free-fall.