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89-471: Some economists argue that capital levies are a disincentive to savings and investment, and cause capital flight , but others argue that in theory this need not be the case. The latter view was popular in the World Wars ; in the 2010s, it has also gained some acceptance as more heavily indebted nations struggle to raise revenues. In ancient Athens during its democracy , there was a form of capital levy known as

178-535: A Public Health Emergency of International Concern from 30 January 2020 to 5 May 2023, and recognized as a pandemic by the World Health Organization on 11 March 2020. The response to the pandemic has led to severe global economic disruption , the postponement or cancellation of sporting, religious, political and cultural events, and widespread shortages of supplies exacerbated by panic buying . Schools, universities and colleges have closed either on

267-499: A liturgy ( Ancient Greek : λειτουργία , romanized :  leitourgia , lit.   '"work for the people"; from litos ergos , "public service"'). The liturgy might be anything from financing a public play to supplying and manning a trireme for the navy. An Athenian could volunteer for such a levy, but if no-one volunteered, a wealthy person meeting the eligibility requirements would be ordered to supply it. They could escape by nominating someone wealthier to take over

356-872: A supply shock ;" in that case it was the Smoot–Hawley Tariff Act precipitating a collapse in international trade during the Great Depression , coinciding with discovery of the East Texas Oil Field during the Texas oil boom . Fears surrounding the Russian–Saudi Arabian oil price war caused a plunge in U.S. stocks, and have had a particular impact on American producers of shale oil . In early April 2020, Saudi Arabia and Russia both agreed to cut their oil production . Reuters reported that "If Saudi Arabia failed to rein in output, US senators called on

445-618: A 16.92% loss, the worst in its history. Germany's DAX fell 12.24% and France's CAC 12.28%. In Brazil, the IBOVESPA plummeted 14.78%, after trading in the B3 was halted twice within the intraday ; it also moved below the 70,000 mark before closing above it. The NIFTY 50 on the National Stock Exchange of India fell 7.89% to more than 20% below its most recent peak, while the BSE SENSEX on

534-649: A 7% drop in global commercial commerce in 2020. While GVCs have persisted, several demand and supply mismatches caused by the pandemic have resurfaced throughout the recovery period and have been spread internationally through trade. During the first wave of the COVID-19 pandemic , businesses lost 25% of their revenue and 11% of their workforce, with contact-intensive sectors and SMEs being particularly heavily impacted. However, considerable policy assistance helped to avert large-scale bankruptcies, with just 4% of enterprises declaring for insolvency or permanently shutting at

623-509: A British publication, opposed capital levies, but supported "direct taxation heavy enough to amount to rationing of citizens' incomes"; similarly, the American economist Oliver Mitchell Wentworth Sprague , in the Economic Journal , argued that "conscription of men should logically and equitably be accompanied by something in the nature of conscription of current income above that which

712-473: A French tax guide, estimates the wealth tax earns the government about $ 2.6 billion a year but has cost the country more than $ 125 billion in capital flight since 1998." A 2009 article in The Times reported that hundreds of wealthy financiers and entrepreneurs had recently fled England, Wales and Scotland in response to recent tax increases, and had relocated in low tax destinations such as Jersey , Guernsey ,

801-447: A country, due to an event of economic consequence or as the result of a political event such as regime change or economic globalization . Such events could be an increase in taxes on capital or capital holders or the government of the country defaulting on its debt that disturbs investors and causes them to lower their valuation of the assets in that country, or otherwise to lose confidence in its economic strength. This leads to

890-522: A disappearance of wealth, and is usually accompanied by a sharp drop in the exchange rate of the affected country—depreciation in a variable exchange rate regime, or a forced devaluation in a fixed exchange rate regime. This fall is particularly damaging when the capital belongs to the people of the affected country because not only are the citizens now burdened by the loss in the economy and devaluation of their currency but their assets have lost much of their nominal value . This leads to dramatic decreases in

979-447: A drop in oil prices ; the collapse of tourism, the hospitality industry , and the energy industry ; and a downturn in consumer activity in comparison to the previous decade. The 2021–2023 global energy crisis was driven by a global surge in demand as the world exited the early recession caused by pandemic-related lockdown measures, particularly due to strong energy demand in Asia. This

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1068-459: A nationwide or local basis in 63 countries, affecting approximately 47 percent of the world's student population. Many governments have restricted or advised against all non-essential travel to and from countries and areas affected by the outbreak. However, the virus is already spreading within communities in large parts of the world, with many not knowing where or how they were infected. The COVID-19 pandemic has had far-reaching consequences beyond

1157-574: A positive growth rate during the recession. Ethiopia is heavily dependent for export income on its national carrier, Ethiopian Airlines , which has announced suspensions on 80 flight routes. Exports of flowers and other agricultural products have dropped sharply. Namibia's central bank sees the nation's economy shrinking by 6.9% This will be the biggest shrink of GDP since its independence in 1990. The tourism and hospitality industries has accounted for N$ 26 billion being lost as 125 000 jobs have been affected. The central bank also announced that

1246-544: A recession was imminent. Rising debt levels in the European Union and the United States had always been a concern for economists. However, in 2019, that concern was heightened during the economic slowdown, and economists began warning of a 'debt bomb' occurring during the next financial crisis . Debt in 2019 was 50% higher than that during the financial crisis of 2007–2008 . Economists have argued that this increased debt

1335-630: A report published by the Wealth Tax Commission in December 2020 recommended the introduction of a one-off wealth tax in case the government chooses to raise taxes in order to address the challenges for public finances posed by the COVID-19 recession . Without taking a stance on specific exemption thresholds or tax rates, the estimations presented in the report imply that a well-designed 5% one-off tax on individual net wealth above £500,000 could raise as much as £260 billion. The recommendations set out in

1424-693: A six-month $ 2 billion currency swap for U.S. dollars , while the Reserve Bank of Australia announced A$ 8.8 billion in repurchases of government bonds. The Central Bank of Brazil auctioned $ 1.78 billion Foreign exchange spots . Asia-Pacific stock markets closed down (with the Nikkei 225 of the Tokyo Stock Exchange , the Hang Seng Index of the Hong Kong Stock Exchange , and

1513-466: A stock market crash and, thereafter, the recession. With new social distancing measures taken in response to the pandemic, lockdowns occurred across much of the world economy . The COVID-19 pandemic was a pandemic of Coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2); the outbreak was identified in Wuhan , China, in December 2019, declared to be

1602-467: A year of global economic slowdown that saw stagnation of economic growth and consumer activity, the COVID-19 lockdowns and other precautions taken in early 2020 drove the global economy into crisis. Within seven months, every advanced economy had fallen to recession . The first major sign of recession was the 2020 stock market crash , which saw major indices drop 20 to 30% in late February and March. Recovery began in early April 2020; by April 2022,

1691-470: A year." Capital flight also takes place in order to evade taxes. In such cases, the flow tends to go in the direction of tax havens . Capital flight may be legal or illegal under domestic law. Legal capital flight is recorded on the books of the entity or individual making the transfer, and earnings from interest, dividends, and realized capital gains normally return to the country of origin. Illegal capital flight, also known as illicit financial flows ,

1780-601: Is absolutely necessary". The Italian government of Giuliano Amato imposed a 0.6 percent levy on all bank deposits on 11 July 1992. In 1999, Donald Trump proposed for the United States a one-off 14.25% levy on the net worth of individuals and trusts worth $ 10 million or more. Trump claimed that this would generate $ 5.7 trillion in new taxes, which could be used to eliminate the national debt . The Cypriot government levied 47.5 percent of Bank of Cyprus deposits over one hundred thousand Euros in July 2013. In October 2013,

1869-471: Is intended to disappear from any record in the country of origin and earnings on the stock of illegal capital flight outside of a country generally do not return to the country of origin. It is indicated as missing money from a nation's balance of payments . In 1995, the International Monetary Fund (IMF) estimated that capital flight amounted to roughly half of the outstanding foreign debt of

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1958-529: Is what led to debt defaults in economies and businesses across the world during the recession. The first signs of trouble leading up to the collapse occurred in September 2019, when the US Federal Reserve began intervening in the role of investor to provide funds in the repo markets ; the overnight repo rate spiked above an unprecedented 6% during that time, which would play a crucial factor in triggering

2047-621: The Bombay Stock Exchange fell 2,919 (or 8.18%) to 32,778. The benchmark stock market index on the Johannesburg Stock Exchange fell by 9.3%. The MERVAL on the Buenos Aires Stock Exchange fell 9.5% to 19.5% on the week. 12 March was the second time, following 9   March, that the 7%-drop circuit breaker was triggered since being implemented in 2013. In Colombia, the peso set an all-time low against

2136-618: The Central Bank of Brazil auctioned an additional $ 3.465 billion the foreign exchange market in two separate transactions and the Bank of Mexico increased its foreign exchange auctions program from $ 20 billion to $ 30 billion. After announcing a $ 120 billion fiscal stimulus programs on 2   December, Japanese Prime Minister Shinzo Abe announced additional government spending, while Indonesian Finance Minister Sri Mulyani announced additional stimulus as well. Black Thursday

2225-554: The Dow Jones Industrial Average futures market experienced a 1,300-point drop based on the pandemic and fall in the oil price described above, triggering a trading curb , or circuit breaker, that caused the futures market to suspend trading for 15 minutes. This predicted 1,300-point drop on 9   March would be among the most points the Dow Jones Industrial Average has dropped in a single day . When

2314-662: The FTSE MIB of the Borsa Italiana fell nearly 17%, becoming the worst-hit market during Black Thursday. Despite a temporary rally on 13 March (with markets posting their best day since 2008), all three Wall Street indexes fell more than 12% when markets re-opened on 16 March. During this time, one benchmark stock market index in all G7 countries and 14 of the G20 countries had been declared to be in Bear markets . Prior to opening,

2403-467: The Global Financial Crisis . 'Cracks' were showing in the consumer market as global markets began to suffer through a 'sharp deterioration' of manufacturing activity. Global growth was believed to have peaked in 2017, when the world's total industrial output began to start a sustained decline in early 2018. The IMF blamed 'heightened trade and geopolitical tensions' as the main reason for

2492-423: The Great Depression in 1929. From 24 to 28 February, stock markets declined the most in a week since the financial crisis of 2007–2008 , thus entering a correction . Global markets into early March became extremely volatile, with large swings occurring. On 9 March, most global markets reported severe contractions, mainly in response to the COVID-19 pandemic and an oil price war between Russia and

2581-841: The IDX Composite of the Indonesia Stock Exchange falling to more than 20% below their 52-week highs), European stock markets closed down 11% (with the FTSE 100 Index on the London Stock Exchange , the DAX on the Frankfurt Stock Exchange , the CAC 40 on the Euronext Paris , and the FTSE MIB on the Borsa Italiana all closing more than 20% below their most recent peaks), while

2670-438: The International Monetary Fund released a report stating, "The sharp deterioration of the public finances in many countries has revived interest in a 'capital levy' – a one-off tax on private wealth – as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior." The next year

2759-737: The Isle of Man , and the British Virgin Islands . In May 2012 the scale of Greek capital flight in the wake of the first "undecided" legislative election was estimated at €4 billion a week and later that month the Spanish Central Bank revealed €97 billion in capital flight from the Spanish economy for the first quarter of 2012. In the run up to the British referendum on leaving the EU ( Brexit ) there

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2848-599: The Reserve Bank of New Zealand cut its official cash rate by 75 basis points to 0.25%. The Czech National Bank announced that it would cut its bank rate by 50 basis points to 1.75%. In April 2020, Sub-Saharan Africa appeared poised to enter its first recession in 25 years, but this time for a longer duration. The World Bank predicted that overall sub-Saharan Africa's economy would shrink by 2.1%–⁠5.1% during 2020. African countries cumulatively owe $ 152 billion to China from loans taken 2000–2018; as of May 2020, China

2937-697: The Schengen Area . Additionally, the European Central Bank , under the lead of Christine Lagarde , decided to not cut interest rates despite market expectations, leading to a drop in S&;P 500 futures of more than 200 points in less than an hour. Bank Indonesia announced open market purchases of Rp 4 trillion (or $ 276.53 million) in government bonds, while Bank Indonesia Governor Perry Warjiyo stated that Bank Indonesia's open market purchases of government bonds had climbed to Rp130 trillion on

3026-413: The diamond-mining sector will decline by 14.9% in 2020, while uranium mining may shrink 22%. Zambia faced a severe debt crisis . Almost half the national budget goes towards interest payments, with questions about whether the country will be able to make all future payments. Argentina entered its 9th sovereign default in history due to the recession. The government has proposed taking over one of

3115-471: The purchasing power of the country's assets and makes it increasingly expensive to import goods and acquire any form of foreign facilities, e.g. medical facilities. Countries with resource-based economies experience the largest capital flight. A classical view on capital flight is that it is currency speculation that drives significant cross-border movements of private funds, enough to affect financial markets . The presence of capital flight indicates

3204-571: The Bundesbank proposed that Eurozone countries should attempt a one-off levy of bank deposits to avoid bankruptcy. A February 2014 report by Reuters showed the idea had gained traction in the European Commission , which will ask its insurance watchdog later that year for advice on a possible draft law "to mobilize more personal pension savings for long-term financing". In the United Kingdom,

3293-652: The COVID-19 pandemic. In response to the pandemic's infection rates and death toll, countries in the Western Balkans, the Eastern Neighborhood, and Central and Eastern Europe faced severe recessions. While stay-at-home orders clearly affect many types of business, especially those that provide in-person services (including retail stores, restaurants and hotels, entertainment venues and museums, medical offices, and beauty salons and spas), government orders are not

3382-478: The COVID-19 recession even further, especially considering China is currently deep within a housing bubble eclipsing the United States housing bubble that led to the previous global recession. The 2021–2023 global energy shortage is the most recent in a series of cyclical energy shortages experienced over the last fifty years. The Russian military buildup outside Ukraine and subsequent invasion have also threatened

3471-633: The Dow Jones Industrial Average closed down an additional 10% (eclipsing the one-day record set on 9   March), the NASDAQ Composite was down 9.4%, and the S&;P 500 was down 9.5% (with the NASDAQ and S&P 500 also falling to more than 20% below their peaks), and the declines activated the trading curb at the New York Stock Exchange for the second time that week. Oil prices dropped by 8%, while

3560-645: The GDP for most major economies had either returned to or exceeded pre-pandemic levels and many market indices recovered or even set new records by late 2020. The recession saw unusually high and rapid increases in unemployment in many countries. By October 2020, more than 10 million unemployment cases had been filed in the United States, swamping state-funded unemployment insurance computer systems and processes. The United Nations (UN) predicted in April 2020 that global unemployment would wipe out 6.7% of working hours globally in

3649-504: The GDP, has largely stopped, while remittances from migrant workers abroad (9% of GDP) are also expected to fall. The cheap fuel prices and slower demand have also led some shipping companies to avoid the Suez Canal , and instead opt for traveling by the Cape of Good Hope , leading to reduced transit fees for the government. However, despite this, Egypt were one of the few African countries to have

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3738-507: The OPEC countries led by Saudi Arabia . This became colloquially known as Black Monday I, and at the time was the worst drop since the Great Recession in 2008. Three days after Black Monday I there was another drop, Black Thursday, where stocks across Europe and North America fell more than 9%. Wall Street experienced its largest single-day percentage drop since Black Monday in 1987, and

3827-652: The Republic of Turkey lowered its reserve requirement from 8% to 6%. The Bank of Japan announced that it would not cut its bank rate lower from minus 0.1% but that it would conduct more open market purchases of Exchange-traded funds . After cutting its bank rate by 25 basis points on 7   February, the Central Bank of Russia announced that it would keep its bank rate at 6%, while the Bank of Korea announced that it would cut its overnight rate by 50 basis points to 0.75%. The Central Bank of Chile cut its benchmark rate, while

3916-515: The Russian oil market due to pre-existing fears by investors by 10 March, there were reports stating that Russia's debt rating was downgraded by Fitch from "B" to "C", indicating a potential default was imminent. This ultimately came to pass after 27 June with the 2022 Russian debt default . The COVID-19 pandemic is the most disruptive pandemic since the Spanish flu in 1918. When the pandemic first arose in late 2019 and more consequently in 2020,

4005-545: The U.S. dollar, when it traded above 4000 pesos for the first time on record. The Mexican peso also set an all-time record low against the U.S. dollar, trading at 22.99 pesos. Over the preceding weekend, the Saudi Arabian Monetary Authority announced a $ 13 billion credit-line package to small- and medium-sized companies, while South African President Cyril Ramaphosa announced a fiscal stimulus package. The Federal Reserve announced that it would cut

4094-455: The UK caused by political figures and movements aiming to oppose, reverse or otherwise impede the 2016 Brexit Referendum, resulting in delays and extensions. Many businesses left the United Kingdom to move into the EU, which resulted in trade loss and economic downturn for both EU members and the UK. In August 2021, it was reported that China's second-largest property developer, Evergrande Group ,

4183-559: The US and the EU. This was in addition to the already existing actions taken by American companies on multiple Russian entities with ties to the Russian government, with Russia's trading status also being called into question on security grounds. Prior to the ban having been implemented, the value of the Russian ruble had dropped by record levels as the price of oil hit a 14-year high. The talks about whether or not to implement an International Energy Embargo were already reported to have been impacting

4272-451: The US, and Europe, following the breakdown of negotiations, as Russia resisted calls to cut production. The biggest discounts targeted Russian oil customers in northwestern Europe. Prior to the announcement, the price of oil had gone down by more than 30% since the start of the year, and upon Saudi Arabia's announcement, it dropped a further 30 percent, though later recovered somewhat. Brent Crude , an oil market used to price two-thirds of

4361-459: The United States, lost over 620 points. The S&P 500 fell by 7.6%. Oil prices fell 22%, and the yields on 10-year and 30-year U.S. Treasury securities fell below 0.40% and 1.02% respectively. Canada's S&P/TSX Composite Index finished the day off by more than 10%. Brazil's IBOVESPA gave up 12%, erasing over 15 months of gains for the index. Australia's ASX 200 lost 7.3%—its biggest daily drop since 2008, though it rebounded later in

4450-495: The White House to impose sanctions on Riyadh, pull out US troops from the kingdom and impose import tariffs on Saudi oil." The price of oil briefly went negative on 20 April 2020. The 2020 stock market crash began on 20 February 2020, although the economic aspects of the COVID-19 recession began to materialize in late 2019. Due to COVID-19 lockdowns , global markets, banks and businesses were all facing crises not seen since

4539-620: The country's history, losing 2,302 points or 6.0%. The market closed with the KSE 100 Index down 3.1%. In India, the BSE SENSEX closed 1,942 points lower at 35,635 while the NSE Nifty 50 was down by 538 points to 10,451. The Washington Post posited that pandemic-related turmoil could spark a collapse of the corporate debt bubble , sparking and worsening a recession . The Central Bank of Russia announced that it would suspend foreign exchange market purchases in domestic markets for 30 days, while

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4628-424: The day. London's FTSE 100 lost 7.7%, suffering its worst drop since the 2008 financial crisis . BP and Shell Oil experienced intraday price drops of nearly 20% The FTSE MIB , CAC 40 , and DAX tanked as well, with Italy affected the most as the COVID-19 pandemic in the country continues. They fell 11.2%, 8.4%, and 7.9% respectively. The STOXX Europe 600 fell to more than 20% below its peak earlier in

4717-441: The duty; if the nominated person disputed this, the nominator could take the liturgy, or offer to exchange property with their nominee ( antidosis ). If the nominee refused, the matter went to court, and the liturgy was assigned whoever the court case determined to be wealthier. Athenians often concealed their wealth to escape taxation, and sycophants who discovered concealed wealth might use it as blackmail material. Antidosis helped

4806-460: The earnings to cover the interest payments on the debt they issued. The McKinsey Global Institute warned in 2018 that the greatest risks would be to emerging markets such as China, India, and Brazil, where 25–30% of bonds have been issued by high-risk companies. During 2019, the IMF reported that the world economy was going through a "synchronized slowdown", which entered into its slowest pace since

4895-508: The economy of countries around the world. In the United States, it brought struggles for farmers and manufacturers and higher prices for consumers, which resulted in the U.S. manufacturing industry entering into a "mild recession" during 2019. In other countries it also caused economic damage, including violent protests in Chile and Ecuador due to transport and energy price surges, though some countries had benefited from increased manufacturing to fill

4984-642: The energy supply from Russia to Europe, while increasing the cost of oil causing European countries to diversify their source of energy import. The economic fallout from the 2021–2023 global energy crisis and the 2022 Russian invasion of Ukraine has had an impact on oil prices worldwide, most notably the unprecedented measures taken on the SWIFT System and Tit-for-Tat Responses to comprehensive sanctions from other countries. Preceding an official announcement regarding import bans on 8 March 2022, there were reports of proposed bans regarding Russian oil and gas imports by

5073-467: The events that led up to the crash. From 2018 to early 2020, U.S. President Donald Trump set tariffs and other trade barriers on China with the goal of forcing it to make changes to what the U.S. described as "unfair trade practices". Among those trade practices and their effects had been the growing trade deficit, the theft of intellectual property, and the forced transfer of American technology to China. Trump's tariffs caused significant damage to

5162-425: The federal funds rate target to 0%–0.25%, lower reserve requirements to zero, and begin a $ 700 billion quantitative easing program. Dow futures tumbled more than 1,000 points and Standard & Poor's 500 futures dropped 5%, triggering a circuit breaker. On Monday 16 March, Asia-Pacific and European stock markets closed down (with the S&P/ASX 200 setting a one-day record fall of 9.7%, collapsing 30% from

5251-534: The gaps. It also led to stock market instability. Governments around the world took steps to address some of the damage caused by the tariffs. During the recession, the downturn of consumerism and manufacturing from the trade war is believed to have worsened the economic crisis. In Europe, economies were hampered due to uncertainty surrounding the United Kingdom's withdrawal from the European Union , better known as Brexit . British and EU growth stagnated during 2019 leading up to Brexit, mainly due to uncertainty in

5340-457: The generally-stated aim of distributing the sacrifices required by the war more evenly. This had a significant effect on both income and wealth distributions, lasting decades into the post-war period. Such policies were commonly referred to as the "conscription of wealth". a fundamental objection to the government's policy of conscription is that it conscripts human life only, and that it does not attempt to conscript wealth... The Economist ,

5429-521: The largest agroexporting companies Vicentín S.A.I.C after it incurred in a debt of more than $ 1.35 billion. The fall in travel was expected to drive Belize into a deep recession in 2020. In 2020, the economy contracted 13.4% with the sharpest declines observed in net foreign demand and private consumption. On an annualized base, the unemployment rate increased 19.1% from September 2019 to September 2020. The Brazilian government forecast that its economy will experience its biggest crash since 1900, with

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5518-552: The last quarter of the 20th century, capital flight was observed from countries that offer low or negative real interest rate (like Russia and Argentina) to countries that offer higher real interest rate (like the People's Republic of China ). A 2006 article in The Washington Post gave several examples of private capital leaving France in response to the country's wealth tax . The article also stated, "Eric Pinchet, author of

5607-465: The lowest it has been since the Iraq War . After OPEC and Russia failed to agree on oil production cuts on 6   March and Saudi Arabia and Russia both announced increases in oil production on 7 March , oil prices fell by 25 percent. On 8   March, Saudi Arabia unexpectedly announced that it would increase production of crude oil and sell it at a discount (of $ 6–8 a barrel) to customers in Asia,

5696-505: The market opened on 9   March, the Dow Jones Industrial Average plummeted 1800 points on opening, 500 points lower than the prediction. The United States' Dow Jones Industrial Average lost more than 2000 points, described by The News International as "the biggest ever fall in intraday trading". The Dow Jones Industrial Average hit a number of trading "circuit breakers" to curb panicked selling. Oil firms Chevron and ExxonMobil fell about 15%. The Nasdaq Composite , also in

5785-480: The most heavily indebted countries of the world. Capital flight was seen in some Asian and Latin American markets in the 1990s. Perhaps the most consequential of these was the 1997 Asian financial crisis that started in Thailand and spread through much of East Asia beginning in July 1997, raising fears of a worldwide economic meltdown due to financial contagion . The 1998–2002 Argentine great depression of 2001

5874-672: The need for policy reform. In the book La dette odieuse de l'Afrique (Africa's Odious Debts), Léonce Ndikumana and James K. Boyce argue that more than 65% of Africa's borrowed debts do not even get into countries in Africa, but remain in private bank accounts in tax havens all over the world. Ndikumana and Boyce estimate that from 1970 to 2008, capital flight from 33 sub-Saharan countries totalled $ 700 billion. A 2008 paper published by Global Financial Integrity estimated capital flight, also called illicit financial flows to be "out of developing countries are some $ 850 billion to $ 1 trillion

5963-542: The peak that was reached on 20 February). The Dow Jones Industrial Average, the NASDAQ Composite, and the S&P 500 all fell by 12–13%, with the Dow eclipsing the one-day drop record set on 12 March and the trading curb being activated at the beginning of trading for the third time (after 9   and 12 March). Oil prices fell by 10%, while the yields on 10-year and 30-year U.S. Treasury securities fell to 0.76% and 1.38% respectively (while their yield curve remained normal for

6052-467: The report were subsequently discussed in the Treasury Select Committee . The chair of the committee, Mel Stride , suggested that the proposal of a one-off wealth tax is “probably nearer the end of the spectrum of the possible-stroke-question mark-desirable than an annual wealth tax.” Capital flight Capital flight , in economics , occurs when assets or money rapidly flow out of

6141-436: The second quarter of 2020—equivalent to 195 million full-time workers. In some countries, unemployment was expected to be around 10%, with more severely affected nations from the pandemic having higher unemployment rates. Developing countries were also affected by a drop in remittances and exacerbating COVID-19 pandemic-related famines . The recession and the accompanying 2020 Russia–Saudi Arabia oil price war led to

6230-483: The slowdown, citing Brexit and the China–United States trade war as primary reasons for slowdown in 2019, while other economists blamed liquidity issues. In April 2019, the U.S. yield curve inverted, which sparked fears of a 2020 recession across the world. The inverted yield curve and China–U.S. trade war fears prompted a sell-off in global stock markets during March 2019, which prompted more fears that

6319-640: The smallest since 2011. A slump in Chinese demand resulted in a meeting of the Organization of the Petroleum Exporting Countries (OPEC) to discuss a potential cut in production to balance the loss in demand. The cartel initially made a tentative agreement to cut oil production by 1.5 million barrels per day following a meeting in Vienna on 5   March 2020, which would bring the production levels to

6408-438: The sole pressure on those businesses. In the United States, people began to change their economic behavior 10–20 days before their local governments declared stay-at-home orders, and by May, changes in individuals' rates of movement (according to smartphone data) did not always correlate with local laws. According to a 2021 study, only 7% of the decline in economic activity was due to government-imposed restrictions on activity;

6497-560: The spread of the disease and efforts to quarantine it. As the pandemic has spread around the globe, concerns have shifted from supply-side manufacturing issues to decreased business in the services sector. The pandemic is considered unanimously as a major factor in causing the recession. The pandemic has affected nearly every major industry negatively, was one of the main causes of the stock market crash and has resulted in major restrictions of social liberties and movement. The COVID-19 crisis affected worldwide economic activity, resulting in

6586-412: The state identify the wealthiest people, and kept the rich suspicious of one another. Athens also had a wealth tax called eisphora (see symmoria ), and for this purpose the city required each rich person give an estimate of his fortune (τίμημα). These self-assessments were not very accurate. The liturgy has not been much studied by economists. During both World Wars, capital levies were introduced, with

6675-551: The third straight trading session). The Cboe Volatility Index closed at 82.69 on 16 March, the highest ever closing for the index (though there were higher intraday peaks in 2008). Around noon on 16 March, the Federal Reserve Bank of New York announced that it would conduct a $ 500 billion repurchase through the afternoon of that day. Indonesian Finance Minister Sri Mulyani announced an additional Rp22 trillion in tax-related fiscal stimulus. The Central Bank of

6764-480: The time of the COVID wave. Aid to people and businesses in the form of employment retention schemes, subsidies, tax relief, and loan guarantee programs totalled roughly 9% of GDP, with substantial cross-country variance, which might reflect policy space and development levels. In the face of considerable liquidity challenges, debt moratoriums and revisions to bankruptcy rules also safeguarded businesses and people during

6853-546: The vast majority of the decline was due to individuals voluntarily disengaging from commerce. The reduction in the demand for travel and the lack of factory activity due to the COVID-19 pandemic significantly impacted demand for oil, causing its price to fall. The Russian–Saudi Arabia oil price war further worsened the recession, due to it crashing the price of oil. In mid-February, the International Energy Agency forecasted that oil demand growth in 2020 would be

6942-484: The world was going through economic stagnation and significant consumer downturn. Most economists believed a recession , though one which would not be particularly severe, was coming. As a result of the rapid spread of the pandemic, economies across the world initiated population lockdowns to curb the spread of the pandemic. This resulted in the collapse of various industries and consumerism all at once, which put major pressure on banks and employment. This caused

7031-413: The world's crude oil supplies, experienced the largest drop since the 1991 Gulf War on the night of 8   March. Concurrently, the price of West Texas Intermediate , another market used as a benchmark for global oil prices, fell to its lowest level since February 2016. Energy expert Bob McNally noted, "This is the first time since 1930 and '31 that a massive negative demand shock has coincided with

7120-571: The year and Rp110 trillion since the end of January. Despite declining to cut its deposit rate, the European Central Bank increased its asset purchases by €120 billion (or $ 135 billion), while the Federal Reserve announced $ 1.5 trillion in open market purchases. Australian Prime Minister Scott Morrison announced a A$ 17.6 billion fiscal stimulus package. The Reserve Bank of India announced that it would conduct

7209-682: The year. In a number of Asian markets—Japan, Singapore, the Philippines and Indonesia—shares declined over 20% from their most recent peaks, entering bear market territory. In Japan, the Nikkei 225 plummeted 5.1%. In Singapore, the Straits Times Index fell 6.03%. In China, the CSI 300 Index lost 3%. In Hong Kong, the Hang Seng index sank 4.2%. In Pakistan, the PSX saw the largest ever intra-day plunge in

7298-473: The yields on 10-year and 30-year U.S. Treasury securities increased to 0.86% and 1.45% (and their yield curve finished normal ). The US's Dow Jones Industrial Average and S&P 500 Index suffered from the greatest single-day percentage fall since the 1987 stock market crash , as did the UK's FTSE 100 , which fell 10.87%. The Canadian S&P/TSX Composite Index dropped 12%, its largest one-day drop since 1940. The FTSE MIB Italian index closed with

7387-489: Was a global stock market crash on 12 March 2020, as part of the greater 2020 stock market crash. US stock markets suffered from the greatest single-day percentage fall since the 1987 stock market crash . Following Black Monday three days earlier, Black Thursday was attributed to the COVID-19 pandemic and a lack of investor confidence in US President Donald Trump after he declared a 30-day travel ban against

7476-598: Was a net capital outflow of £77 billion in the preceding two quarters, £65 billion in the quarter immediately before the referendum and £59 billion in March when the referendum campaign started. This corresponds to a figure of £2 billion in the equivalent six months in the preceding year. COVID-19 recession The COVID-19 recession was a global economic recession caused by COVID-19 lockdowns . The recession began in most countries in February 2020. After

7565-473: Was about $ 51 trillion in 2019, compared to $ 34 trillion in 2009. If the economic climate worsens, companies with high levels of debt run the risk of being unable to make their interest payments to lenders or refinance their debt, forcing them into restructuring . The Institute of International Finance forecast in 2019 that, in an economic downturn half as severe as the 2008 crisis, $ 19 trillion in debt would be owed by non-financial firms without

7654-462: Was considering granting deadline extensions for repayment, and in June 2020, Chinese leader Xi Jinping said that some interest-free loans to certain countries would be forgiven. Botswana has been affected by sharp falls in the diamond trade , tourism and other sectors. The Economy of Egypt suffered from the COVID-19 recession. Tourism, which employs one in ten Egyptians and contributes about 5% of

7743-411: Was entrenched in $ 300 billion (~$ 333 billion in 2023) of debt. As the company missed several payment deadlines in September 2021, it seemed likely the company would fail without government intervention, as stocks within the company having already plummeted by 85%. Since China is the second largest economy in the world and property makes up a large amount of their GDP, it threatens to destabilise

7832-468: Was in part the result of massive capital flight, induced by fears that Argentina would default on its external debt (the situation was made worse by the fact that Argentina had an artificially low fixed exchange rate and was dependent on large levels of reserve currency ). This was also seen in Venezuela in the early 1980s with one year's total export income leaving through illegal capital flight. In

7921-618: Was then further exacerbated by the reaction to escalations of the Russo-Ukrainian War , culminating in the Russian invasion of Ukraine and the 2022 Russian debt default . Since the financial crisis of 2007–2008 , there has been a large increase in corporate debt , rising from 84% of gross world product in 2009 to 92% in 2019, or about $ 72 trillion. In the world's eight largest economies—China, United States, Japan, United Kingdom, France, Spain, Italy, and Germany—total corporate debt

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