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The new year will also be difficult in Europe, in part because the recession started there about six months later than in the United States, says Guillén, who is also director of Wharton's Joseph H. Lauder Institute of Management & International Studies. He adds that European economies are less flexible than the U.S. system and will take longer to adjust to the changing economic climate, prolonging the downturn. "The outlook for 2009 in Europe is not great. It's going to be a difficult year."

The global economic slump threatens to stall Eastern Europe's promising economic growth. "For the last 10 years, all these countries have been trying to make the transition to a market economy, and the financial systems are kind of shaky," he says. "I think they're going to have some hard times."

While the transition will slow growth, Guillén does not believe governments in these emerging markets will backslide into protectionism or reject other free-market characteristics of their economies, although they may postpone additional reforms. "The countries that have become members of the European Union realize how important that is for them and they don't want to do anything that will jeopardize their standing," Guillén notes.

Meanwhile, Russia is suffering from a sharp decline in oil prices, and is a key factor in what will happen in the European economy in 2009.

According to Guillén, Russia's manufacturing sector is not competitive globally and the country has essentially become dependent on commodities which fluctuate wildly in value. Despite a well-educated population with strong capabilities in engineering and science, Russia's commodity booms have crowded out investment in other parts of the economy, undermining global competitiveness.

Allen points out that Europe is experiencing a deep recession, especially in the United Kingdom. Germany, Spain and Ireland have also been hit hard, although France is holding up a little better because greater state involvement in the economy is somewhat cushioning citizens from the downturn. Italy, despite long-term structural problems in the economy, is also faring relatively well at the moment because of low levels of debt.

Europe, he adds, is likely to experience deflation, but will keep interest rates at 1.5% or 2%, while the United Kingdom will be more aggressive and may let rates fall to zero percent or 0.25%. Low rates have advantages and disadvantages, he says: While they help soften the impact of recession, they can delay recovery.

Around the world, emerging markets in Latin America, India and China are still growing, but at lower rates -- exposing some underlying problems in their economies.

Latin America: Economic Highs And Lows

Latin America, which is typically a casualty in global financial crises, has managed to keep itself afloat this time. According to Juan Carlos Martínez Lázaro, professor at the IE Business School, Latin America finished 2008 with a growth rate of more than 4%. The first part of the year was very strong as a result of record-high prices for raw materials, making up for the sharp declines during the second half of the year.

However, 2009 is going to be hard for Latin America, which will not be able to totally escape the global economic problems, says Martínez Lázaro. He predicts that the region will suffer the impact of the global downturn in several areas: manufacturing exports, remittances from workers living abroad, investments and financing. Some countries will suffer more than others.