Depression to Recession Contrast
Depression Lesson to Recession
November 27, 2012
TABLE OF CONTENTS
ABSTRACT …...............................………………..…………………………………….3
INTRODUCTION…………………….…………………………………………….……3
PART I
CAUSES………………………………..…………………………………………………4
RESPONSE………………………………….……………………………………………8
ALTERNATIVE STRATAGIES,ACTIONS,ANDIMPLEMENTATIONS……….…….14
POSITIVE AND NEGATIVE AFFECT OF POLICIES……….……………..………….17
CAUSES OF THE FINANCIAL CRISIS………………………..…………..….………..22
THE GREAT RECESSION………………………………………………………………25
ALTERNATIVE RECESSION STRATEGIES…………………………………………..36
FORESEEABLE OUTCOME OF THE RECESSION.................................………….........39
EVALUATION OF GOVERNMENT RESPONSES............................................................41
PART II
ECONOMIC BUBBLES…………………………………………………………………..45
CONCLUSIONS/RECOMMENDATIONS………………………………………………59
REFERENCES…………………………………………………………………………….61
APPENDIX
Table 1…………………………………………………………………………..…60
Abstract Business cycles are inevitable in the existence of an economic system. They are recorded, studied, and analyzed by economists, economic historians, financial analysts, investors, government officials, and professionals from all angles. From there, monetary policies, investment strategies, economic theories are developed and devised in response to changes, events, peaks or troughs. The most commonly used as an example of how an event can affect the global financial system is the Great Depression. It serves as a benchmark for the severity of an economic decline. Its causes and effects have been used as a textbook case. One would think that the advance of technology which enables the availability of information, combined with the exhaustion of study of the Great Depression, history would not repeat itself. That school of thought was proven to be far from correct as the financial crisis in the United States unfolded in 2008. Dubbed as the Great Recession, the effect of it was astounding and long lasting that as of the time
November 27, 2012
TABLE OF CONTENTS
ABSTRACT …...............................………………..…………………………………….3
INTRODUCTION…………………….…………………………………………….……3
PART I
CAUSES………………………………..…………………………………………………4
RESPONSE………………………………….……………………………………………8
ALTERNATIVE STRATAGIES,ACTIONS,ANDIMPLEMENTATIONS……….…….14
POSITIVE AND NEGATIVE AFFECT OF POLICIES……….……………..………….17
CAUSES OF THE FINANCIAL CRISIS………………………..…………..….………..22
THE GREAT RECESSION………………………………………………………………25
ALTERNATIVE RECESSION STRATEGIES…………………………………………..36
FORESEEABLE OUTCOME OF THE RECESSION.................................………….........39
EVALUATION OF GOVERNMENT RESPONSES............................................................41
PART II
ECONOMIC BUBBLES…………………………………………………………………..45
CONCLUSIONS/RECOMMENDATIONS………………………………………………59
REFERENCES…………………………………………………………………………….61
APPENDIX
Table 1…………………………………………………………………………..…60
Abstract Business cycles are inevitable in the existence of an economic system. They are recorded, studied, and analyzed by economists, economic historians, financial analysts, investors, government officials, and professionals from all angles. From there, monetary policies, investment strategies, economic theories are developed and devised in response to changes, events, peaks or troughs. The most commonly used as an example of how an event can affect the global financial system is the Great Depression. It serves as a benchmark for the severity of an economic decline. Its causes and effects have been used as a textbook case. One would think that the advance of technology which enables the availability of information, combined with the exhaustion of study of the Great Depression, history would not repeat itself. That school of thought was proven to be far from correct as the financial crisis in the United States unfolded in 2008. Dubbed as the Great Recession, the effect of it was astounding and long lasting that as of the time
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