What Causes an Economic Downturn?
What Causes an Economic Downturn?
The financial crisis is still the cause of the economic downturn. Depending on which experts you choose to believe, the current state of economy was first cyclical than secular (Leonhardt, 2011). This resulted in both crisis being opposing destructive financial forces.
The current global financial crisis begins with worthless subprime mortgages and the banking systems cease to cooperate with each other. The failure on Wall Street when the realization those companies such as Lehman Brothers failed and the cause and effect theory heard around the world (Elliott, 2011). Consumers and businesses lost trust in the financial system.
The interest rates were down to nil and governments created stimulus packages, various countries developed fiscal expansion directives in an effort to stop the freefalling economy (Elliott, 2011). The international cooperation during such times in the past was non-existed due to the impact on various countries trying to safe their own falling economies (Elliott, 2011).
This has led to the latest crises in the European Union when Greece needed provisions to assist their government that had become insolvent (Elliott, 2011). For the United States, The S&P dropped the triple A rating to double A for the first time in financial history. The economy continues to be sluggish with negative prosperity bogging down the nation (Elliott, 2011).
The global decline is problematic for every country, with little visible economic growth internationally or nationally. As the United States continues to struggle to find its financial legs, the question now is are we slipping back into another recession? The answer remains unclear at this time. References
Elliott, L. (2011, August 7). Global financial crisis: five key stages 2007-2011. Retrieved October 19, 2011from http://www.guardian.co.uk
Leonhardt, D. (2011, October 8). The depression: if only things were that good. Retrieved October 19, 2011from http://www.nytimes.com
References: Elliott, L. (2011, August 7). Global financial crisis: five key stages 2007-2011. Retrieved October 19, 2011from http://www.guardian.co.uk Leonhardt, D. (2011, October 8). The depression: if only things were that good. Retrieved October 19, 2011from http://www.nytimes.com
The financial crisis is still the cause of the economic downturn. Depending on which experts you choose to believe, the current state of economy was first cyclical than secular (Leonhardt, 2011). This resulted in both crisis being opposing destructive financial forces.
The current global financial crisis begins with worthless subprime mortgages and the banking systems cease to cooperate with each other. The failure on Wall Street when the realization those companies such as Lehman Brothers failed and the cause and effect theory heard around the world (Elliott, 2011). Consumers and businesses lost trust in the financial system.
The interest rates were down to nil and governments created stimulus packages, various countries developed fiscal expansion directives in an effort to stop the freefalling economy (Elliott, 2011). The international cooperation during such times in the past was non-existed due to the impact on various countries trying to safe their own falling economies (Elliott, 2011).
This has led to the latest crises in the European Union when Greece needed provisions to assist their government that had become insolvent (Elliott, 2011). For the United States, The S&P dropped the triple A rating to double A for the first time in financial history. The economy continues to be sluggish with negative prosperity bogging down the nation (Elliott, 2011).
The global decline is problematic for every country, with little visible economic growth internationally or nationally. As the United States continues to struggle to find its financial legs, the question now is are we slipping back into another recession? The answer remains unclear at this time. References
Elliott, L. (2011, August 7). Global financial crisis: five key stages 2007-2011. Retrieved October 19, 2011from http://www.guardian.co.uk
Leonhardt, D. (2011, October 8). The depression: if only things were that good. Retrieved October 19, 2011from http://www.nytimes.com
References: Elliott, L. (2011, August 7). Global financial crisis: five key stages 2007-2011. Retrieved October 19, 2011from http://www.guardian.co.uk Leonhardt, D. (2011, October 8). The depression: if only things were that good. Retrieved October 19, 2011from http://www.nytimes.com