Economic slowdown or weakening of US economy is bad news not only for United States but, for the entire world. International economy was majorly impacted by the Dot Com Bubble in the 2001 to 2003; and the recession era in 2008 to 2009.
The consequences of recession was felt by United States, Russia, European Union, Japan, Australia, Eastern Asia and many other countries.
There was tremendous rise in the economy in 1990’s, hence, many economists predicted the recession in 2000’s, which was felt by US and many countries around the world. At the same time, few countries expanded their economy and were not hit by the recession.
Dot Com Bubble:
Several factors contributed in the collapse of dot com bubble, which was a new experiment in the investment era from 1995 to 2001. As there was tremendous growth in internet users in 1990’s, many companies tried to attract customers through internet to expand their customer base; hence they engaged themselves in the daring business to dominate the market. As these companies had .com web addresses, the 2001 recession is called dot com bubble. Companies sponsored events and sports activities during the rise in mid 1990’s, but the illusionary market growth dipped down rapidly in 2001, equalizing the correction. This led to a decline in many businesses and blow to the dot com and IT industries, which began to fold one by one. Other factors which affected the dot com bubble were the rise in outsourcing, IT sector unemployment, wake of terrorists attack and loss of customer’s faith on the dot com companies.
As it was predicted by many economists, harsh recession began from 2001 and was in almost all the continents. Many employees were forced to work on reduced salary to equalize recession and during that time, undesirable recession was forced, but it was not officially declared until 2004. After the crash of dot com bubble and Nasdaq in 2003, the market contributed in recession and unemployment in the United States.
International economy and most of the developing countries were hit by increased food and fuel prices in 2008 to 2009. The growth of international economy weakened in 2007 from 5.2% to -1.1% in 2009. Drop in foreign direct investment, export revenue, tourism revenue and employment rate also contributed towards the worldwide recession.
Today, due to the rise in the broadband users for social networking and other internet activities, some financial experts again fear dot com proliferation for tech industry soon and refer it as bubble 2.0.