Keeping a perspective on the global recession

There has been much attention on the global economic recession from the media, government, and international agencies. The recession in developed countries is disruptive, but not an enormous catastrophe.

The IMF is predicting a decline of around 3.5 percent on average in the world's leading economies next year. The fall is large, and puts the economy back to where it was three years ago. If governments or banks are guilty of incompetence they have lost three years of potential growth for everyone. There will be disruption and some people will have greater difficulties than average.

A three percent downturn would put the developed economies back to where they were in 2006, or to put it another way, in the third richest year in human history. Even if the economy contracts 25 percent - ie, goes through a Great Depression - the developed economies would still be in their tenth richest year in history.

Here's a satire pointing out the difference between current and past downturns.