Over recent years, the global economy has been hit by large negative demand shocks that resulted from a sizeable loss of wealth, following sharp declines in house and stock prices and the tightening of financial conditions associated with the ongoing financial crisis (see Decressin and Laxton, 2009). The combination of the financial crisis, the downturn in the global economy and the increase in unemployment also gave rise to a loss of confidence that intensified the downward pressures on the economy. The downturn was particularly steep in industrialized economies and in some emerging economies such as those of Eastern Europe.