The United States and Global Economic Crisis (No. 23)

Abstract

In 2008, financial crisis in the U.S., mostly resulted from easy lending in housing sector, gradually led to a great economic crisis with a global scale.

During this crisis, many banks and credit institutions were exposed to bankruptcy. The impact of this crisis on different countries varied depending on the degree of their integration into the world economy. In fact, economic interdependency contributed to the spread of the crisis in an unprecedented pace.

The majority of developed countries experienced lack of the economic growth in 2006. The Chinese economy which in the past, witnessed a two-digit growth, experienced the growth rate of 9%. one of the consequences of the crisis was much lower prices of oil leading to the great loss of oil exporting countries.

Generally, the abovementioned crisis affected many sectors including trade, finance, investment, stock exchange, banking, insurance, commodity market, services, etc. due to the systemic nature of global economy.

The historical study of comparable economic crises suggests that under these circumstances, countries tend to adopt protectionist policies leading to more recession. However, it is expected that major economic powers try to foster the economic stability by keeping open their markets.

Holding the two rounds of G-20 summit conference in Washington and London was among the measures used by major economic powers for crisis management and reforming international financial system.

Also, the economic crisis affected energy market. It entailed reduction in the level of GDP in the world and thus reduction in crude oil demand which led to lower oil prices. Also the crisis limited investments in the exploration and development of oil fields.

Since the global economic crisis has indirectly affected negatively Iran’s economy, its study is of great importance. While studying the roots and factors shaping the U.S. financial crisis and its eventual transformation into a global economic crisis, this book examines its impact on great powers and relations between them.

The first chapter, entitled “Globalization and the U.S. Value Domination” takes a look at the evolution of capitalist world economy and then studies the U.S. role in legitimizing its desirable definition of facts to make credible its envisioned political and economic structure.

The second chapter, “The U.S. Economic Crisis and Implications of Economic Policies under Bush” tries to explain the root causes of financial crisis in the U.S. resulted from policies adopted by President Bush”.

The third chapter, “Iraq, War and Its Impact on the U.S. Financial Crisis” argues that the wars in Iraq and Afghanistan and their costs have played a facilitating role in the emergence of the financial crisis.

The fourth chapter, entitled “The U.S. Financial Crisis and Its Impact on the International Role of the EU” studies the consequences of the U.S. financial crisis for the economic transatlantic relations and the EU’s economic power and status.

The next chapter entitled “The U.S. Approach to Economic Relations with China” draws attention to the importance of economic and commercial transactions between the U.S. and China. It reviews the history of their economic relationships while emphasizing their complicated interdependent economic ties in the context of the current crisis.

The sixth chapter, “The Impact of Economic Crisis on Russia’s Foreign Policy” tries to evaluate the vulnerability of Russian economy against the global economic crisis and its reflection on Russian’s foreign policy.

In the concluding chapter, the report of a roundtable held in the Foreign Policy Research Department of the CSR on “Economic Crisis and Its Impact on International System” is presented. The impact of economic crisis on relations between great and emerging powers, the impact of the crisis on international regimes, its impact on globalization, its consequences for the Middle East and oil producing countries are among issues discussed in this roundtable.