The Global Financial Crisis

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Introduction In 2008, the world experienced a tremendous financial crisis which is rooted from the U.S housing market. Moreover, it is considered by many economists as one of the worst recessions since the Great Depression in 1930s. After bringing a huge effect on the U.S economy, the financial crisis expanded to Europe and the rest of the world. It ruined economies, crumble financial corporations and impoverished individual lives. For example, the financial crisis has resulted in the collapse of massive financial institutions such as Fannie Mae, Freddie Mac, Lehman Brothers and AIG. These collapses not only influenced own countries but also international scale. Hence, the intervention of governments by changing and expanding the monetary and fiscal policy or giving bailout is needed in order to eliminate and control enormous effects of the financial crisis. The overwhelming spread of the global crisis and poses great challenges for the Asian and Pacific regions as well as Vietnam. Vietnam is known as one of the most open economies of the globe and it relies deeply on external capital sources (e.g. FDI or ODA) to support its development demands. Thus, Vietnam is highly vulnerable to the vast effects of the financial crisis on global trade and financial flows. Firstly, this essay attempts to analyse the causes of the financial crisis which originated from the U.S. Secondly, the impacts of the financial crisis on Vietnamese economy particularly on the general economy outlook as well as the labour market will be examined. Finally, this essay will present the responses of Vietnamese government so as to reduce influences of the recession. II. The global financial crisis and Vietnam A.Main causes of the global financial crisis T... ... middle of paper ... ....html (Accessed: 20th August 2010). Pham, Q.N. (2009) Impact of the global financial and economic crisis on Vietnam, a rapid assessment. Available at: http://www.ilo.org/asia/whatwedo/events/lang--en/docName--WCMS_103550/index.htm (Accessed: 3rd August 2010). Krugman, P. (2009) ‘Revenge of the Glut ‘, The New York Times, March [Online]. Available at: http://www.nytimes.com/2009/03/02/opinion/02krugman.html (Accessed: 3rd August 2010). Steverman,B. and Bogoslaw, D. (2008) ‘The financial crisis blame game’, Business week, October [Online]. Available at: http://www.businessweek.com/investor/content/oct2008/pi20081017_950382.htm?chan=top+news_top+news+index+-+temp_top+story (Accessed: 1st August 2010). Velde,D.K (2008). The global financial crisis and developing countries. Available at: http://www.odi.org.uk/resources/download/2462.pdf (Accessed: 5th August 2010).

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