Looking beyond the third quarter, survey indicators, such as the Purchasing Managers’ index (PMI) and European Commission business surveys for the manufacturing and the services sectors, point to ongoing growth in October. Consumer confidence increased in October and stood above its long-term average, pointing to a gradual recovery in euro area consumption.
If a negative shock decreases demand in any large economy, the negative effects ripple through the world economy. In the current crisis, the sudden and very large disruption in the functioning of the global banking system made the problems even worse. After the collapse of Lehman Brothers in September 2008, one third of the volume of the world trade disappeared almost overnight.