The First Global Financial Crisis of the 21st Century

Laura  Alfaro; Renee  Kim

Case | HBS Case Collection | April 2009

The First Global Financial Crisis of the 21st Century

Abstract

The global economy was expected to suffer from negative growth for the full year in 2009, a phenomenon not seen since World War II. While the U.S. subprime mortgage disaster was blamed as the original instigator, it was noted that the "global imbalances" of the U.S. current account deficit funded for many years by other nations such as China were also a chief culprit of the crisis. Policymakers around the world recognized that the scope and scale of the financial crisis required a coordinated global response. Yet there were conflicting views on what kind of action was needed to address the first global financial crisis of the 21st century.

Keywords: Financial Crisis; Mortgages; Globalized Economies and Regions; Policy; International Relations; Business and Government Relations; Conflict and Resolution;

Format: Print

15 pages

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Citation:

Alfaro, Laura, and Renee Kim. "The First Global Financial Crisis of the 21st Century." Harvard Business School Case 709-057, April 2009.

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For decades, Chile was heralded as South America’s pillar of stable economic growth. Chile was the world’s largest producer of copper and enjoyed a long period of over 30 years of world demand for its resources. In 2013, the commodity boom ended and was replaced by a slow period of economic activity. By 2019, a culmination of factors had contributed to widespread protests. Major streets in Santiago were shut down due to demonstrations by workers across 20 ports. Mining unions urged the government to lift the state of emergency and end curfews. It was unclear how these stoppages would affect copper production and prices in a country that produced a third of the world’s supply.

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The First Global Financial Crisis of the 21st Century

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