Introduction

In the years 2008–09, following the Global Financial Crisis (hereafter the GFC), the global economy experienced its worst economic recession since the Great Depression. Some ten years later, this book examines the macroeconomic dynamics of the global economy in the aftermath of the GFC. The book is split into four sections. First, we look at the supply side of the economy and how potential growth is likely to have been affected by the GFC, against a backdrop of a long-run decline in productivity and rising inequalities. Second, we examine the impact of the GFC on demand, focusing on trends in global trade, household consumption and business investment. Third, we discuss how monetary policy reactions after the GFC were rapid and large enough to sustain the global economy and the international monetary system, but also take a closer look at the challenges ahead for central bankers, notably low inflation regimes, heightened uncertainties and low natural interest rates. The final section points out some stylized facts on the external sector variables of countries such as capital flows, exchange rates and cross-border monetary policy spillovers.