Management Thinking and Practice
It is evident that the whole world is in a recession similar to what Knoop (2004) had talked about. The Independent had covered the important economies of Europe and had shown that starting from Germany, the largest economy of the Continent to Iceland, an economy dependant on the handouts of its Nordic neighbors and the IMF had been affected. Germany that is dependant on export for at least 30% of its income had lost at least 10% of its global export market share that will lead to a GDP contraction of 2. 1%.
One of the reasons that attributed to this is the drying up of its export to Britain and China where the former was buying a record number of cars from Germany while the latter was importing machine tools. The UK also had seen a GDP contraction of 3% labeled as the worst since the Second World War. France, the second largest economy in the Continent had suffered a GDP contraction of 1. 2% and the reason for that had been the sluggish export and investment markets worsened by a crisis that has afflicted the French car Industry.
The Continent’s fourth economy Italy also had seen its economy contracting 1.
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If there is any European nation that has not felt the recession, it might be Switzerland. The reason for that is the role it is playing as a safe haven might have attracted money from those that are wary of the recession, contributing for the high performance of the Swiss franc, although the nation’s GDP might contract by 1. 8% next year. The Japanese economy is also suffering the same fate according to the NYT and is detiriorating at a fast pace worse than what it suffered in the 1970s oil crisis.
The attributing reason for that is the same as the others where its export market is shrinking and consumers at home are not spending. The contraction figure for Japan is phenomenal at 12. 7%. This shows that the economy that is heavily dependent on export is much vulnerable than the others to the current recession. In all this the world’s largest economy the US where all the problems started had suffered a at least a 3. 8% contraction of GDP. The percentage of the decline for the first quarter of 2009 could be a moderated 1. 1%.