Combination of these events induced a degree of recessionary tendencies and inflationary pressures across developed and developing countries. Policy-makers were gripped with the dual challenge of slowdown in growth and unprecedented rising inflationary pressures. Central bankers faced a demanding task of weighing the trade-off between growth and price stability.
Global imbalances  Although the world economy may have achieved a degree of immunity from cyclical downturns in the United States, it is probably still true to say that if the US had to catch a cold, the rest of the world would run the risk of catching a bad case of flu.