Examining the global reach of the 2008 US economic downturn

Abstract

This article analyzes how the 2008 US economic downturn propagated through the global trading system, creating an economic contagion around the world. Consistent with previous global crises, the reach and impact of this crisis is not the same across different regions. This article contributes to the literature by examining the effect of dependency on the country of origin of a crisis, openness to international trade, and the role a country plays in the global trading network to explain the variation in the reach and the impact across countries. The article concludes with policy recommendations to avoid future economic contagions or reduce their impact. © 2011 Wiley Periodicals, Inc.