The Global Financial Crisis had a significant impact on the global economy, causing global GDP to fall by 2.1% in 2009. FOOTNOTE The advanced economies experienced an unprecedented 7.5% decline in real GDP during the last quarter of 2008.
2.4.1 The United States
In the United States, Economic Growth increased from negative 1.2% in 2008 to negative 3.7% in 2009. DATA WORLDBOOK In the wake of the crisis many worried about the future of the economy. Events such as the fall of both influential and respected major banks and financial authorities, such as Lehman Brothers on September 14, 2008, caused the public to question the stability of our economic system. As uncertainty loomed over the economy, consumer and business confidence simultaneously fell. Total expenditure sharply declined, resulting in a fall in economic growth.
Europe was affected even worse, with the European Union experiencing a fall of GDP of 4.4% in 2009. DATA WORLDBOOK Unemployment was rife, with youth unemployment worst affected, reaching over 25% in countries such as Greece and Spain. Austerity measures took place in Greece, causing massive protests and public outrage as pensions were cut, retirement age rose and public spending on education and health was reduced.
Even areas of the world seemingly disconnected from the financial systems in Wall Street where the crash originated, such as Africa, did experience slowdowns. A fall in spending in rich countries on imports of African and Latin American goods caused a fall in economic activity in these regions of the world as well, since they relied heavily on the sale of their imports to rich countries.
The GFC affected Austra...
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...of this perpetuating problem is greed, a lack of ethics and responsibility. “The root cause of the global financial crisis was not a failure of regulation, but of ethics,” Simon Longstaff, Executive Director of Sydney’s St. James Ethics Centre (Business Think UNSW). Ethical behaviour is the making of self-conscious choices in line with an organisations framework of values and principles of correctness. A midst the emerged ethical awareness from the GFC, interpretations of how ethics is applied in a corporate context are often confused, calling the need for clear policies set by management promoted through effective leadership as otherwise, it is often difficult to identify unethical behaviour until it effects the whole organisation. Government’s have also realised the importance to apply strict regulations on any unethical business as well as intervene when required.
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