What Happened During The 2007-2009 Recession Analysis
Analysis of What Happened During the 2007-2009 Recession
Introduction
The US experienced the great recession from the final months of 2007 to mid 2009. The crisis was characterized by massive loss of jobs and a low consumption of products as well as a downturn in investment rates in the country. Significant loss of wealth ultimately led to a decline in consumer spending and not even the slight improvement could create a great enough impact for job creation. Even as the dust was settling, high rates of population explosion worsened the situation since the economy could no longer sustain more employment and reemployment of those who had lost their jobs during the recession.
Macroeconomic Factors
The imbalance in international trade between various countries was one of the contributing factors in the recession. Besides, the lending techniques and taxation procedures were at fault as they collectively led to a high level of debt and the crashing of the real estate sector. Evidently, this was generated by the increase in the amount of funds available for investment and the consequent …show more content…
In fact, this may have been due to circumstances such as the decrease in inflation which consequently led to the rise in competition in the country (“Bush Signs Stimulus Bill,” 2008). Eventually, the demand for the dollar increased thereupon strengthening the currency a little bit and the dollar managed to maintain its value in the face of these challenges. Many investors still believed that the US was a safe place to invest in despite the situation because of the high debt of most economies. It is noteworthy that the situation promoted trade between various countries that never traded with the US before on a large scale such as Mexico (“Global Economic Policies and Prospects,” 2009). Although this may have not had a large impact on the US economy, it significantly promoted the economies of the poorer
Introduction
The US experienced the great recession from the final months of 2007 to mid 2009. The crisis was characterized by massive loss of jobs and a low consumption of products as well as a downturn in investment rates in the country. Significant loss of wealth ultimately led to a decline in consumer spending and not even the slight improvement could create a great enough impact for job creation. Even as the dust was settling, high rates of population explosion worsened the situation since the economy could no longer sustain more employment and reemployment of those who had lost their jobs during the recession.
Macroeconomic Factors
The imbalance in international trade between various countries was one of the contributing factors in the recession. Besides, the lending techniques and taxation procedures were at fault as they collectively led to a high level of debt and the crashing of the real estate sector. Evidently, this was generated by the increase in the amount of funds available for investment and the consequent …show more content…
In fact, this may have been due to circumstances such as the decrease in inflation which consequently led to the rise in competition in the country (“Bush Signs Stimulus Bill,” 2008). Eventually, the demand for the dollar increased thereupon strengthening the currency a little bit and the dollar managed to maintain its value in the face of these challenges. Many investors still believed that the US was a safe place to invest in despite the situation because of the high debt of most economies. It is noteworthy that the situation promoted trade between various countries that never traded with the US before on a large scale such as Mexico (“Global Economic Policies and Prospects,” 2009). Although this may have not had a large impact on the US economy, it significantly promoted the economies of the poorer