Global Recession Essay

2050 Words5 Pages
bulb-icon

Recommended: Great depression and great recession compare

A recession is a period of temporary economic decline during which trade and industrial activity are reduced. Many economists generally define the attributes of a recession are two consecutive quarters with declining in GDP.The great recession began with the bursting of an 8 trillion dollar housing bubble, resulting loss of wealth that led to sharp cutbacks in consumer spending. It started from December 2007 to June 2009. Many factors contributed to the economy's to fall into a recession, but the major cause argued are inflation , failure at major financial institutions globally , starting with the rescue of investment Bear Stearns and the failure of Lehman Brothers in 2008. The crisis came unexpected to many policymakers, agencies, academics and investors. A day before the outbreak of the financial crisis, Jean Philippe of the OECD ( 2007 ) said " for the OECD area as a whole growth is set to exceed its potential rate for the remainder of 2007 and 2008, supported by optimism in emerging market economies and promising financial conditions ".At the beginning of the global recession of 2007-2009, the economics career has come under a great deal of criticism from leading scholars Krugman .He blamed his fellow economists for their recklessness to the very possibility of terrible failures in a market economy . Therefore, it is not a surprising that the Great Recession happened. A majority of the global downturn was underestimated. Of course, there were some voices that issued warnings about the Great Recessions, but they were not enough to catch the attention of many policymakers. As the economy spirals downwards, more people become unemployed , meaning more homre repossessions, meaning more losses for banks, meaning less credit av... ... middle of paper ... ...ssion and spur recovery. Economics deals with efficiency the scarce resources are used and the opportunity costs involved .The choice can be between the overall costs vs. overall quality,, and the decision would be based on the opportunity cost of the situation, opportunity cost are concepts involved in almost every aspect of the economy and how it is affected is no different when it comes to the issue of recession. When these resources are limited, the producers should make decisions about how to handle the situation. They must change their business. A recession is something that for the most part is predictable, yet can be devastating to a country's economy. The concepts of scarcity, choice, and opportunity cost are major factors in whether or not a recession occurs or not. These concepts are synonymous with our understanding of the economy and in essence ever

Show More
Related

  • ECN 440 Term Paper

    847 Words  | 2 Pages

    2007-2008-2009 global financial crisis - many people compared to the experience to another large scale depression - now coined “great recession”

    Read More

  • Economic History of Prince Edward Island

    1153 Words  | 3 Pages

    By definition, an economic depression is a “sustained, long-term downturn in economic activity in one or more economies.” (http://en.wikipedia.org/wiki/Economic_depression) The latter, is far worse then a recession. A recession is merely an economic slowdown, which was experienced by most Atlantic Provinces in the late 19th century.

    Read More

  • Impact of the Great Recession in Texas and the Rio Grande Valley

    2714 Words  | 6 Pages

    Taylor, J. B. (2009). The financial crisis and the policy responses: An empirical analysis of what

    Read More

  • An Analysis Of The Panic Of 1819

    1070 Words  | 3 Pages

    The United States first major economic recession was the Panic of 1819, which led to unemployment and a political debate over how to approach the economic plunge. This happened due to the fact that banks throughout the country failed as a result of irresponsible banking practices. American banks gave out huge loans for settlers trying to expand their land and businesses. Many of the loans the banks gave out were not formally issued. Countless Western banks were very negligent with offering discount rates on loans to clients. This led to the foreclosures of farms and widespread personal and business failures. When Americans lost most of their money people were left jobless and homeless with many businesses going under. Debates

    Read More

  • National Debt Essay

    1380 Words  | 3 Pages

    The national debt surfaced after the revolution when the United States government had to borrow funds from the French government and from the Dutch bankers. By 1790, the U.S. government accumulated millions in debt, but no one knew precisely how much. The Constitution mandated that the new government take over the debts of the old government under the Articles of Confederation.

    Read More

  • Great Depression vs. The Great Recession

    1439 Words  | 3 Pages

    Since being founded, America became a capitalist society. Being a capitalist society obtains luxurious benefits and rather harsh consequences if gone bad. In a capitalist society people must buy products and spend money to keep the economy balanced, but once those people stop spending money, the economy goes off balance and the nation enters a recession. Once a recession drastically takes a downturn, the nation enters what is known as a depression. In 2008 America entered a recession and its consequences were severe enough for some people, such as President Barack Obama, to compare the recent crisis to the world’s darkest economic depression in history, the Great Depression. Although the Great Depression and the Great Recession of 2008 hold similarities and differences between the stock market and government spending, political issues, lifestyle changes, and wealth distribution, the Great Depression proved far more detrimental consequences than the Recession.

    Read More

  • The Great Recession

    670 Words  | 2 Pages

    It can be argued that the economic hardships of the great recession began when interest rates were lowered by the Federal Reserve. This caused a bubble in the housing market. Housing prices plummeted, home prices plummeted, then thousands of borrowers could no longer afford to pay on their loans (Koba, 2011). The bubble forced banks to give out homes loans with unreasonably high risk rates. The response of the banks caused a decline in the amount of houses purchased and “a crisis involving mortgage loans and the financial securities built on them” (McConnell, 2012 p.479). The effect on the economy was catastrophic and caused a “pandemic” of foreclosures that effected tens of thousands home owners across the U.S. (Scaliger, 2013). The debt burden eventually became unsustainable and the U.S. crisis deepened as the long-term effect on bank loans would affect not only the housing market, but also the job market.

    Read More

  • The 2008 Economic Recession

    1050 Words  | 3 Pages

    Looking back to the Carter and Reagan Administration’s, you can begin to see where the Recession originated from. Prior to the Reagan administration, the United States economy experienced a decade of rising unemployment and inflation. Political pressure favored stimulus resulting in an expansion of the money supply. Reagan wanted to increase defense spending while lowering taxes, Reagan's approach was a departure from his immediate predecessors. Reagan enacted lower marginal tax rates in combination with simplified income tax codes and continued deregulation. During Reagan's presidency the annual deficits averaged 4.2% of GDP after inheriting an annual deficit of 2.7% of GDP in 1980 under President Carter. The real

    Read More

  • The Great Recession Essay

    1080 Words  | 3 Pages

    What caused the Great Recession that lasted from December 2007 to June 2009 in the United States? The United States a country with abundance of resources from jobs, education, money and power went from one day of economic balance to the next suffering major dimensions crisis. According to the Economic Policy Institute, it all began in 2007 from the credit crisis, which resulted in an 8 trillion dollar housing bubble (n.d.). This said by Economist analysts to attributed to the collapse in the United States. Even today, strong debates continue over major issues caused by the Great Recession in part over the accommodative federal monetary and fiscal policy (Economic Policy Institute, 2013). The Great Recession of 2007 – 2009 enlarges the longest financial crisis since the Great Depression of 1929 – 1932 that damaged the economy.

    Read More

  • Dbq Essay On The Great Depression

    1807 Words  | 4 Pages

    The Great Depression was the biggest and longest lasting economic crisis in U.S history. The Great depression hit the united states on October 29, 1929 When the stock market crashed. During 1929, everyone was putting in mass amounts of their income into the stock market. For every ten dollars made, Four dollars was invested into the stock market, thats forty percent of the individual's income (American Experience).

    Read More

  • The Great Depression of the 1930s in Canada

    1319 Words  | 3 Pages

    ...ults of the recession. In order for this never to happen again, there is a need to learn from the mistakes in the past and to look for the warning signs. The problem is not just restricted to one country, but is a global problem and needs to be addressed as such.

    Read More

  • The Great Depression in "Cinderella Man"

    1586 Words  | 4 Pages

    middle of paper ... ... It is evident that although we may be entering into a recession on different terms than the one before, the United States is still in danger of once again becoming a victim of another Great Depression. The Great Depression is a time in the history of the United States that people have learned and gained knowledge from. Its harsh times and conflicts have been written about in books, seen in movies, talked about on radios, and told to families throughout the generations.

    Read More

  • Great Recession Essay

    760 Words  | 2 Pages

    In economics, a recession occurs when there is a slowdown in the spending of goods and services in the market. A recession causes a drop in employment, GDP growth, investment, as well as societal well-being. All recessions are caused by a specific cause, but the Great Recession of 2007-2009 was caused by a crash in the housing market. This crash was triggered by a steep decline in housing prices. All of a sudden, people bought houses because there was an excessive amount of money in the economy and they thought the price of houses would only increase. (Amadeo, 2012). There was a financial frenzy as the growing desire for homes expanded. People held a lot of faith in the economy and began spending irrationally on houses that they couldn’t afford. This led to overvalued estate and unsustainable mortgage debt. (McConnell, Brue, Flynn, 2012).

    Read More

  • 2008 Financial Crisis Essay

    1536 Words  | 4 Pages

    I. Introduction. How to use a symposia? The "subprime crisis" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain on a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis.

    Read More

  • How did economists get it so wrong?

    2018 Words  | 5 Pages

    Shortly after the financial crisis in 2008, many economists had to rethink their approach to the market. Everyone knew we had a panic because the stock market and the housing market collapsed. American economy was reaching to the bottom. Many people considered it as a second worst recession after the great the Great Depression. But what was the cause? Who were responsible for the crisis? What can we learn from this turmoil? In the recent New York Times Sunday magazine article, Nobel Prize winner Paul Krugman offered his explanation for the causes and insight toward fixing the economy.

    Read More

More about Global Recession Essay

Open Document