estimates at the time of writing this paper, it is not possible to conclude whether the year 2019 constituted a global downturn.

The U.S. economy during global recessions and downturns. Although the four global recessions coincided with recessions in the United States, not every U.S. recession was associated with a global recession. In fact, the United States experienced six additional recessions during 1950-2019, including recessions in 1958 and 2001 that coincided with global downturns. But it grew strongly during the 1998 global downturn and, to a lesser extent, during the 2012 global downturn.<sup>19</sup>

# 3.2. Events Surrounding the Global Recessions

The four global recessions identified above were all characterized by severe economic and financial disruptions in many countries around the world. But each recession had its own unique features.<sup>20</sup> In particular, the shocks that contributed to the global recessions were different. The 1975 global recession was driven mainly by a global supply shock—the oil price shock of 1973-74. The 1982 episode followed a series of shocks, including the oil price shock of 1979; the subsequent rise in global inflation; monetary policy responses to that increase in inflation, especially the marked monetary tightening by the U.S. Federal Reserve; and the Latin American debt crisis.

However, there are also similarities across the global recessions, including in their origins. A number of countries experienced financial crises during the four global recessions.<sup>21</sup> In the 1991 global recession, a wide range of national shocks were transmitted across borders, including financial disruptions and exchange rate crises in some advanced economies, especially in Europe, and a major shift in political and economic systems in many Eastern European countries. The 2009 episode originated mainly from problems in the U.S. financial sector that started to become evident in 2007. These problems rapidly propagated to other advanced economies and some EMDEs through trade and financial linkages.

The global recession of 1975 followed the shock to world oil prices from the Arab oil embargo initiated in October 1973. Although the embargo ended in March 1974, the supply shock and associated sharp rise in oil prices triggered a substantial increase in inflation and a significant weakening of growth in a number of countries. Monetary and fiscal policy easing, especially by some major advanced economies, helped spur a rebound of growth in 1976. However, the Group of Seven countries except for Germany and

> 19 Average per capita GDP growth in the United States during the global recessions and global downturns identified above was -2.1 percent and 0.6 percent a year, respectively. While U.S. per capita output contracted in the 1958 global downturn (by 2.4 percent) and was virtually stable in 2001, it expanded in 1998 and 2012 (by 3.2 percent in the former case and 1.4 percent in the latter).

> 20 The events surrounding these episodes are discussed in detail by Knoop (2004), Allen (2009), Reinhart and Rogoff (2009), Kose and Terrones (2015), and Kose et al. (2020). Barsky and Kilian (2004), Hamilton (2013), and Baffes et al. (2015) present surveys of the history of oil shocks and the associated economic downturns.

> 21 Financial crises—including banking, currency, and sovereign debt crises—took place in 15, 62, 67, and 38 countries during the 1975, 1982, 1991, and 2009 global recessions (including the two years before and after the recession years) (see Laeven and Valencia 2018). Most of the financial crises in the 1975 global recession were currency crises in EMDEs, while Chile and Spain experienced systemic banking crises in 1976 and in 1977, respectively.

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