As stock markets take a beating and policymakers across the world try to resuscitate economic growth, observers say a return to a global downturn would be an all-out disaster for investors, businesses and average consumers everywhere.
If consumers scale back amid higher unemployment and fear for their financial futures, businesses would suffer because of declining demand. Many companies would choose not to invest in new factories or research and development, worried that returns would not justify costs.Declines in global markets could breed more consumer panic when investors look at their brokerage statements and find themselves poorer. Investment banks that grease the wheels of global capital would see their fortunes decline, too, with fewer mergers to advise on and less investment advice to give.
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