This paper utilizes an in-depth analysis and review of the financial crisis with emphasis on its causes, policy responses, and consequences. The paper highlights that the global economy was unstable contrary to the suggestion that it was stable prior to the crisis. …
Download file to see previous pages...
According to the research findings the 2007 global financial crisis has had serious impacts on the economies of many countries, resulting to what economists call the Great Recession. The downturn began initially as an isolated problem with the sub-prime sector in the US housing market, mutating to a serious and fatal recession by the beginning of 2008. Consequently, other nations especially in the European Union followed the US into the crisis by mid-2008. In essence, 2009 was the first recorded year in history that the global economy was actually in recession since the Second World War. Interestingly, the recession came as a surprise to many economists, investor, academics, policy-makers, and multilateral agencies. For instance, Organization for Economic Co-operation Development’s Jean-Philippe Cotis was quoted as speculating further growth in the global economy because of the buoyancy of emerging economies and favoring financial conditions. After the economy drove into recession, the economics profession was under fire for failure to predict the financial downturn. As a result, there were few intellectual conversations taking place between scholars of like minds. Therefore, the underestimation of the severity of the global downturn was not surprising. Indeed, some leading financial forecasters like World Bank and International Monetary Funds revised their initial to their growth forecasts in 2008 and 2009. Nonetheless, there were warnings from a few economists of a brewing economical disaster. A portion of the economist predicted a looming recession based on economic models where the accumulation of the private sector was the central cause. However, their cries were not significant enough for the majority of the lulled individuals. Despite all these, the warning signs were blinking red: loose monetary policy especially in the US, lax in financial regulation, misperception of risk and search for yield, and huge current deficits in UK, US, and other super economies that accumulated huge savings of oil exporters and emerging economies. Events of 2008, with emphasis on the collapse and consequent closure of Lehman Brother, reversed the perceptions of risk-taking banks (Clungston, 2008). However, the complexity and nature mortgage-backed securities left most banks in the dark concerning the exact level of liabilities that was linked to the severing housing sector in the US. Thus, liquidity of most banks dried up, literary bringing the global financial system to a halt. Some critiques were quick to question the survival of the American-style capitalism. Governments in developing and advanced countries were quick to react aggressively, injecting obscene credit amounts into their financial markets, reducing interest rates, nationalizing banks, and unveiling stimulus packages to increase discretionary spending. Most policymakers were determined to avoid mistakes from previous crises, and their response was important avoiding disastrous depression in most countries,
...Download file to see next pagesRead More
Cite this document
(“The Great Recession 2008 Term Paper Example | Topics and Well Written Essays - 3000 words”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1395918-the-great-recession-2008
(The Great Recession 2008 Term Paper Example | Topics and Well Written Essays - 3000 Words)
“The Great Recession 2008 Term Paper Example | Topics and Well Written Essays - 3000 Words”, n.d. https://studentshare.org/macro-microeconomics/1395918-the-great-recession-2008.
This study looks into the Great Inflation of the 1970s as the period during which the U.S experienced the worst economic downturn in recorded history. Characterized by high inflation and high unemployment, the Great Inflation of the 1970s was caused by poor monetary and fiscal policies by the Federal Reserve Bank, under political pressure from President Richard Nixon.
According to the study conducted the Great Depression brought unprecedented changes to American life in a variety of its aspects: economic, social, political, domestic, cultural, etc. The Great Depression developed as a result of considerable disparities in the American societies as well as the uncontrolled speculation in the stock market.
2008 Financial Crisis
Until the start of the financial crisis in August 2007, the world was experiencing strong economic growth (Obstfeld & Rogoff). Investors and consumers were optimistic in their expectations, which reflected itself in high consumption and investment rates.
All the media across the world is talking about recession every day. Whether it is a news paper, on a news channel on television, or some news bulletin on radio, everywhere people are talking about recession, the methods to recover from the recessionary situation and so on.
Introduction In this paper I discuss recession and the current economy down turn. I will define recession and its impact on the business world. The options to challenge recession and to overcome the impediments are also discussed. My second area of discussion is about investments.
The study further gives examples of how individuals can take precautions to protect themselves in case of recession or depression.The effect of depression and recession on supply and demand of products is also explained in the study. Recession This is a term that is used in economics to mean a decline in economic activities.
The great depression and the last recession of 2008-2009 are different in terms of their lasting periods, causes, and effects on employment and world trade. Lasting period: The great depression is one great economic disaster that ever happened in history, making it greater than the recession in the modern times.
The dictatorship attitude which managers or rather the employers had changed with the clutter of companies spurting across sectors all over the world. Anybody with good job skills is one with wings, free to fly to shores that are greener.
Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail
Many writers have written about the accounts of their lives as well as their imaginations and poured their heart and soul out onto pages for others to read. Some of these very books have gone on to become the world’s greatest pieces of literature. Most people that read them have some or the other kind of appreciation in their minds for the words.
5 Pages(1250 words)Term Paper
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Term Paper on topic The Great Recession 2008 for FREE!