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The Great Recession of 2009

One step forward, one step back?

European Economic and Monetary Affairs Commissioner Joaquin Almunia presents the spring economic forecast during a news conference at the EU Commission headquarters in Brussels May 4, 2009. Europe's economy will not start recovering until the second half of next year, the European Commission said that week, as it slashed its forecasts to reflect the region's deepest recession since World War II. (Francois Lenoir/Reuters)

BOSTON — For those paying attention to the global economic meltdown, this week started pleasantly enough.

On Monday, European Central Bank president Jean-Claude Trichet said the global downturn had bottomed out. The world economy was around the “inflection point,” he said, with some economies already turning higher.

“In all cases, we see a slowing down of the decrease in GDP,” Trichet beamed. “In certain cases, you see already a picking up.”

Trichet’s buoyancy was accompanied by a report from the Organization for Economic Cooperation (OECD), which noted a “pause” in the economic contractions of the U.K., France, Italy and China.

Two days later, there was even some hopeful news out of struggling Japan, the world’s second-largest economy. The country’s central bank governor, Masaaki Shirakawa, said the Japanese economy is showing signs of recovery and is expected to stabilize by the end of the year.

Throughout economic circles there was a sudden lightening of the doom and gloom that has darkened much of the world the past eight months.

Former IMF chief economist Simon Johnson and Peter Boone of the London School of Economics co-wrote a piece in The New York Times Economix blog that argued, in part, that “the restoration of confidence is due to a targeted and appropriately sized fiscal stimulus” by the Obama administration.

“This is a major achievement,” Johnson and Boone wrote. “We cannot emphasize enough how bad the world’s financial markets have looked at various points since September — including during the first month or so of President Obama’s administration. Market attitudes have changed profoundly since the beginning of March. It’s no longer ‘sell the collapse’ but much more ‘buy the dips’; this is the essential ingredient needed to stave off bank runs and to keep markets from spiraling downward in self-fulfilling collapse.”