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Global Economic Downturn Persists

Gerhard Fenz (), Ingrid Haar-Stöhr () and Maria Silgoner
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Gerhard Fenz: Oesterreichische Nationalbank, Economic Analysis Divison, http://www.oenb.at
Ingrid Haar-Stöhr: Oesterreichische Nationalbank

Monetary Policy & the Economy, 2008, issue 3, 6–20

Abstract: The global economic downturn is persisting. In the U.S.A., tax rebates provided only a temporary stimulus to the economy. As the U.S. real estate crisis continues, it triggered the takeover of mortgage finance corporations Fannie Mae and Freddie Mac by their regulator in early September 2008. The crisis of the U.S. real estate and financial sectors, which has gathered momentum lately, sustained high commodity prices and the deterioration in the labor market are all badly damaging consumer confidence. As a reaction to the most recent aggravation of the financial crisis, the U.S. government announced its plan to establish a well-endowed stabilization fund. As to the euro area, economic growth slowed unexpectedly sharply in the second quarter of 2008. Real GDP contracted by 0.2% quarter on quarter. Particularly, gross fixed capital formation made a negative contribution to growth, but also consumer restraint depressed economic performance. The ECB’s current projections assume only a gradual improvement in the economy.

Keywords: global outlook; euro area; central and (south-)eastern Europe; Austria (search for similar items in EconPapers)
JEL-codes: E2 E3 O1 (search for similar items in EconPapers)
Date: 2008
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