On the morning of 30 September 2008, I handed The Garnaut Climate Change Review to the then Prime Minister of Australia, Kevin Rudd.

First, however, the Prime Minister wanted to talk about an urgent calamity. Overnight—that morning Australian time—the New York Stock Exchange had suffered its largest-ever points fall. All of the media talk was of the collapse of the international financial system and of imminent global recession. The collapse did indeed turn out to be great, with most of the main Wall Street financial institutions disappearing, or being taken over by others, and in any case being rescued by government. This massive restructuring of the centre of global finance was accompanied by a freeze in global markets the like of which had not been seen in 80 years. The crash was followed by an equally dizzying plunge in world trade as a series of global economic imbalances were corrected with ruthless speed.

In developed economies the Great Crash was followed by a Great Recession, the largest blow to growth since the Great Depression of the 1930s. Overall, the growth in economic output in developed countries contracted by 2.7 percentage points from 2007 to 2009, with the biggest falls in Japan and Europe. Australia was one of the few developed countries to avoid recession, with GDP growing by 3.6 per cent from 2007 to 2009.

However, as precipitous as it was, the Great Crash proved to be only a temporary deceleration of growth in developing countries. Led by China and India, but extending to and beyond Indonesia and Brazil, they returned quickly to the strong economic growth that had characterised the early 21st century.