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By definition, a recession refers to a two or more consecutive quarters of a general decline in economic activity [gross domestic product] (Gwartney, Stroup, Sobel and Macpherson 171). Generally a precursor of a depression, a recession is comparatively less severe but with almost similar dramatic economic effects.
While the numerous past recessions appear unique in terms of origin, all are preceded by the Greenspan’s irrational exuberance that unduly escalates asset values (5). To be sure, there is no one single cause of a recession (Simpson 12-13). Economists are in agreement that while a significant event in a particular sector with notable economic effects may be a trigger, a number of factors often come into play to magnify economic contraction into a visible catastrophe. Accordingly, the causes are categorized into two: the demand side shocks that hit one or various components of the aggregate demand [AD] and the supply-side shocks that affect the short-run aggregate supply, inflation [through cost push], investments and business profits. According to the demand side economics, a recession can be triggered by one or a combination of: an economic slump of a major trading partner, which may be a country or region/an economic block [such as the EU]; a credit crunch driven by the inability of the financial institutions to meet lending requirements of households and businesses or conscious cutting back of credit through abnormally raised interest rates on loans; a sharp fall or total collapse of crucial asset prices [such as property prices]; and a trade imbalance prompted by an abnormal appreciation of the exchange rate (Tatom 2). On the other hand, the supply recession-causing shocks include: increasing international oil prices that subsequently translate into increased cost of production [through the oil costs
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Furthermore, the torture black women face for the fear of giving birth to the less weight children is adverse as the whites only associates the babies to poor practices such as smoking, poor parental care and taking alcohol. Another aspect of the society that causes psychological and mental health is the social gap that separates the whites from the blacks due to the level of poverty.
Recession mostly occurs when there is a wide spread decrease in spending and this can be caused by various activities such as external trade shock, an adverse supply shock, and financial crisis. Economic recession is mostly responded by the government adopting and implementing certain economic policies such increasing the amount of money in circulation, decreasing taxation in order to create an atmosphere that can allow an increase in public spending (Haslam, Neale & Sukhdev, 2000).
Prior to the recession, the United Kingdom was the world’s top manufacturing nation. As the manufacturing industry suffered in Britain from the effects of the recession, competitors from other nations such as the United States, France, and Germany overtook it.
Many indicators of macroeconomics vary in an almost similar perspective and this includes the measurements of production which are investment spending, incomes of the households, employment, investment spending and business profits. During an economic recession all these indicators are at low levels.
Any inter-relation between growth, recessions and interest rates is entirely a reduced form of correlation as they are all derived intrinsically. Nonetheless, in accordance with the historical evidences, the three-month less ten-year term spread has illustrated a counteractive relationship with the factual Gross Domestic Growth over sequential quarters, and an absolute relationship with the uneven constraints of a recession.
The first model focuses on inconsistencies between a country's external commitments, such as a fixed or pegged exchange rate, and its internal economic fundamentals. For example, a government that is running a fiscal deficit might pressure its central bank to help finance the budget by printing money.
downturn in the financial sector and this has triggered problems in banking, employment, financial markets and other aspects of the different economies worldwide. The United Kingdom (UK) has been experiencing symptoms of the recession for some time now and has now admitted that
Among factors that labour experts point to as the causes of low employee morale has been discussed below.
Firstly, Varjan (2010) points to misemployed people as one of the causes of low employee morale. By
According to Wallison (2009), key issues that led to the crisis included increment and sudden reduction in house prices as well as increases in default rates in 2006. Furthermore, the collapse of stock prices in 2008 speeded by Bear and Lehman’s failures fuelled the crisis (Wallison, 2009, p. 3).
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