From Crisis to Supranational Integration
New Directions in Modern Economics series
The economic geography of the world is rapidly changing. The economic contraction and the financial crisis caused by the burst of the sub- prime bubble in the US primarily hit advanced countries where unemployment rose, government budgets deteriorated and prolonged economic stagnation followed the sharp recession of 2008–2009. Outside advanced countries, the consequences of the financial crisis were less severe and emerging economies quickly returned to their previous rapid growth. The different impact of the financial crisis on advanced and emerging countries should not be a surprise because an examination of world development patterns over the last 15 years shows that new economic powers are already eroding centuries- old European and North- American supremacy. We know that, after World War II, the US overtook the UK as the world’s leading country and that in the Cold War period the two American and Russian superpowers ruled a bipolar order where alternative social, political and economic models faced off . After the fall of the Berlin Wall in 1989 and the subsequent implosion and disintegration of the USSR, bipolarity ended and Russia, along with many Eastern European countries, started a difficult transition period toward the market economy. Many observers interpreted those dramatic events as the triumph of the ‘American century’, an era in which the only remaining superpower, the US, would dominate politically and economically for many years.
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