As the real effects of the financial crisis magnified over time and the initial decoupling perception turned out to be a myth, the IMF revised its global growth outlook for 2009 downwards repeatedly from 3.9 per cent in July 2008 to -1.4 per cent in July 2009. The volume of world trade has also been projected to contract by 12.1 per cent in 2009.
It is the serious real costs of a financial crisis that has led to large scale use of fiscal and monetary policy stimulus all over the world. In view of the adverse feedback loop in the advanced economies, policies have aimed at addressing both financial stress and the economic recession, since addressing any one would not weaken the vicious loop.