- Don Drummond is Chief Economist at TD Bank Financial Group. The opinions expressed are his own. -
The Great Recession is over in North America. But repair will be a slow work in progress and great risks remain. Many of these risks are centred on policy matters. The recession shook our understanding of some policy matters to the core, leaving more questions than answers.
The Great Recession produced deep output and employment losses in many countries, certainly including Britain and the U.S., but also an unprecedented degree of synchronization around the globe.
That synchronization produced the first annual output loss for the global economy since data began in the early 1960s. Fortunately, we are also seeing synchronization in the recoveries, to the point that global output should rise about 4 per cent in 2010.
The tighter degree of synchronization of cycles is likely a permanent feature of the global economy going forward. In part, it reflects unprecedented co-ordination of policy responses. International policy co-ordination could help promote growth and reduce the severity of cycles if the group-think reflects wisdom. But errors could have magnified impacts of taking almost all economies down. Much is at stake. But much is also in question.