In 2006, the housing industry boomed, creating more jobs and increasing wages. Speculation was viewed as a source of economic growth and the Federal Reserve was seen as able to control potential threats. Today, housing prices have fallen, unemployment is high and debt is a problem for households, firms and government. This change is due to the Global Financial Crisis (GFC), sometimes called the Great Recession to show its similarities and its differences with the Great Depression. “Economic data indicate that, sooner or later, capital accumulation comes up against obstacles that slows it down or stops it altogether.[…] A short period of such disruption is called a recession, while a longer, deeper downturn is called a depression. […] Right now we are in a deep recession, which might become a depression.” (Fred Magdoff and Michael D.Yates, 2009, The ABCs of the economic crisis page 28). As GFC has negatively impacted the economy, it is important to understand why and how this obstacle of growth has appeared. Reactions of the governments in Australia and in other countries will be studied. Finally, the consequences on immigration will be evaluated.

1. International dimensions of the Global Financial Crisis (GFC) 1.1. Description of GFC

A recession is defined as a period of two quarters of negative GDP growth (about.com economics). According to the data provided by the OECD website concerning the GDP growth rates (summarized in table 1 below), the United States entered into recession since the third quarter of 2008 until the second quarter of 2009.

Table 1 GDP growth rates from 2006

This crisis began in 2007 when the subprime mortgage market collapsed in the United States. The crisis was sudden but experts foresaw major problems (Stiglitz, in 2004, warned about the foundations of 1990s for economic and social disaster and Whitney, in October 2005, warned of distinct signs of liquidity problems in the US). There have been warnings but they have been