World Economic Crisis: Roots, Dimensions and Consequences

Interdependence combined with intertwined global economy created a situation in which the U.S. financial crisis took on, very quickly, international dimensions and led to a global economic crisis affecting a wide range of countries to varying degrees. The U.S. financial crisis mostly stemmed from crisis in housing market, falling U.S. dollar exchange rate, increase in oil prices, military expenditures in Iraq and Afghanistan and finally interdependence of U.S. and European financial systems. Since there is a close relationship between economic instability and inequality on the one hand, and political and social instability on the other, and given increasing expansion of economic crisis throughout the world and the threat facing international financial and monetary security, international security and current world system and structure are exposed to a great change. The historical study of previous economic crises in the world shows that in such cases, states resort to protectionist policies resulting in deepening world recession, while it is expected that great economic powers keep open their markets to exports. Holding G-20 Summits in Washington and London aimed at crisis management and international financial system reform. This article explains the roots and various dimensions of the crisis and studies the suggested solutions. Finally, it addresses the impact of this crisis on energy market and Iranian economy.