The Great Recession, which began in December 2007 and ended in June 2009, was the longest and most severe recession in the United States since the Great Depression of the 1930s. It was caused by the financial crisis of 2007-2008, which was triggered by a housing market bubble and the failure of several large financial institutions.
The housing market bubble was fueled by easy credit conditions, which allowed people to take out mortgages with little or no money down. Many of these mortgages were subprime, meaning they were made to borrowers with poor credit histories or high levels of debt. As housing prices rose, more and more people took out mortgages, and the market became increasingly inflated.
The financial crisis was triggered when the housing market bubble burst, causing housing prices to plummet and many borrowers to default on their mortgages. This led to a cascade of defaults and foreclosures, which in turn led to the failure of several large financial institutions, including Lehman Brothers and Bear Stearns.
The financial crisis had a ripple effect on the rest of the economy, as it led to a credit crunch, which made it difficult for businesses to borrow money and invest in new projects. This, in turn, led to a sharp decline in economic activity, as businesses scaled back production and laid off workers.
The Great Recession officially ended in June 2009, but the recovery was slow and uneven. Unemployment, which had peaked at 10% in October 2009, remained elevated for several years, and many people who lost their jobs during the recession never regained their pre-recession income levels. The recovery also varied by sector, with some industries, such as manufacturing, recovering more quickly than others, such as construction.
The COVID-19 recession, which began in February 2020, was caused by the COVID-19 pandemic and the measures taken to contain it, such as lockdowns and travel restrictions. The pandemic and the resulting economic downturn have had a profound impact on the global economy, as businesses have been forced to close or scale back operations and many people have lost their jobs.
The US economy was particularly hard hit, as the country has one of the largest and most complex economies in the world. The unemployment rate soared in the early months of the pandemic, as businesses across a range of sectors, including retail, hospitality, and leisure, were forced to shut down or significantly reduce their operations.
The government responded to the crisis by enacting several measures to support the economy, including the CARES Act, which provided financial assistance to individuals and small businesses, and the Paycheck Protection Program, which provided loans to small businesses to help them keep their workers on the payroll.
The economy has been recovering from the COVID-19 recession, but the pace of recovery has been uneven and has been affected by the ongoing pandemic. Some sectors, such as manufacturing and technology, have recovered more quickly than others, such as hospitality and leisure. The unemployment rate has also declined, but it remains elevated compared to pre-pandemic levels.
There have been several other recessions in the United States over the past several decades. Some of the most significant recessions include:
The recession of 1981-1982, which was caused by a combination of rising interest rates, high oil prices, and a slowdown in the global economy. The recession was relatively short-lived, but it had a lasting impact on the economy, as it led to a slowdown in the growth of productivity and a rise in inequality.
The recession of 1990-1991, which was caused by a slowdown in the global economy, a drop in oil prices, and the collapse of the savings and loan industry. The recession was relatively mild, but it was followed by a period of slow
The recession of 2001, which was caused by a combination of the dot-com bubble, the September 11th terrorist attacks, and the corporate accounting scandals. The recession was relatively mild, but it was followed by a period of slow economic growth.
The Great Recession of 2007-2009, which was caused by the financial crisis of 2007-2008 and had a severe impact on the global economy.
In addition to these recessions, there have been several other economic downturns in the United States over the past several decades, although these downturns were generally less severe than the recessions listed above.
In general, the causes of recessions in the United States have varied, but they have often been related to changes in the global economy, shifts in monetary and fiscal policy, and changes in consumer and business confidence. After a recession ends, the economy typically begins to recover, although the pace of recovery can vary and may be affected by a variety of factors, such as the severity of the recession, the effectiveness of government policies, and the state of the global economy.
are there any commonalities?
There are several commonalities among the recessions that have occurred in the United States over the past several decades:
Recessions are typically characterized by a significant decline in economic activity, as measured by gross domestic product (GDP), employment, and other indicators.
Recessions are often caused by a combination of factors, rather than a single event or policy change. For example, the Great Recession was caused by a housing market bubble and the failure of several large financial institutions, while the COVID-19 recession was caused by the COVID-19 pandemic and the measures taken to contain it.
Recessions tend to have a disproportionate impact on certain sectors of the economy and certain groups of people. For example, the Great Recession had a particularly severe impact on the construction and manufacturing sectors, while the COVID-19 recession has had a disproportionate impact on the hospitality and leisure sectors.
Recessions tend to be followed by a period of recovery, although the pace of recovery can vary and may be affected by a variety of factors, such as the severity of the recession, the effectiveness of government policies, and the state of the global economy.
Recessions can have long-lasting effects on the economy and on individuals and families, as people who lose their jobs or experience other financial setbacks may struggle to regain their pre-recession income levels or financial stability.
recession vs depression, what's the difference?
A recession is a period of economic downturn that is characterized by a decline in economic activity, such as GDP, employment, and trade. Recessions are generally considered to be less severe than depressions, which are prolonged periods of economic decline that are characterized by a more significant decline in economic activity. One way to distinguish between recessions and depressions is by their duration. Recessions are typically shorter in duration than depressions, although there is no strict rule for how long a recession must last in order to be considered a depression. Some experts define a recession as lasting at least six months, while others define it as lasting at least two consecutive quarters. Another way to distinguish between recessions and depressions is by their impact on the economy. Recessions are typically associated with a decline in economic activity, but the decline is generally not as severe as in a depression. Depressions, on the other hand, are characterized by a more significant decline in economic activity and can have widespread effects on the economy and society. It is also worth noting that the terms "recession" and "depression" are sometimes used colloquially to refer to any period of economic downturn, regardless of its severity. However, in a more technical sense, these terms refer to specific levels of economic decline.