Study of the Global Economic Recession

Abstract

Since 2020, the global economy and financial system have suffered the biggest demand and supply shock since the financial crisis in 2008 as the new pneumonia epidemic spread to almost all countries. Panic in international financial markets has been rising, and asset prices of stocks, bonds, currencies, commodities and other assets have fallen rapidly. This paper analyzes the impact of the epidemic on the global economic and financial system from different perspectives, including the supply chain, the Russia-Ukraine war, and the US interest rate hike. In this paper, we argue that since 2020, the "pandemic" of Newcastle pneumonia has caused a comprehensive impact on the manufacturing industry, service industry, public confidence, and social governance, and a liquidity crisis in the international financial markets. Whether the epidemic will evolve into a financial and economic crisis depends on the development of the epidemic and the effectiveness of preventive and control measures, on whether the epidemic will trigger corporate debt defaults and sovereign debt crises in some countries, and on whether a fall in oil prices or geopolitical conflicts will trigger financial and capital flow crises in emerging markets. Given the inevitable impact of the epidemic on the economic growth situation in various regions, the global economy is expected to fall into recession in the future.