The Challenges Ahead

Abstract

This chapter discusses the period after the Great Recession, when the USA started to slowly emerge from it. It notes that the turmoil that had affected the financial markets had led to increased sensitivity to perceptions of risk, so when the damages caused by the subprime mortgage boom had been contained, the markets’ concerns shifted to other dangers which might be ahead, and focused on the high debt ratios of many developed countries, particularly in Europe. The problems then faced by Greece can be attributed in part to this, but the broader implication has been a questioning of the euro’s long-term viability, which affected the EU countries in general. The chapter also examines some of the potential implications of Brexit.