“The sharp decline in economic activity during the late 2000s, which is generally considered the largest down turn since the Great Depression” (Investopedia). This is the general definition of the Great Recession.
The national bureau of economic research dates the Great Recession from December 2007 to June 2009, lasting a total of eighteen months, making it known as the longest recession since the Great Depression. As the loss of wealth decreased consumer spending we experienced extensive job loss, “In 2008 and 2009, the U.S. labor market lost 8.4 million jobs, or 6.1% of all payroll employment” (Working America). Causes of the Great Recession include the bursting of the housing bubble, rising inequality, the loosening of bank lending rules and the corresponding rise in consumer debt, and the rise of mortgage securitization with too little regulatory oversight. …show more content…
Alone the housing burst rocked the banking system nearly causing a complete economic meltdown. “The value of real estate owned by U.S. households fell by nearly $6 trillion”(FiveThirtyEight). Typically the housing market is not susceptible to a pricing bubble. The housing bubble began primarily by an increase in demand, this occurs because of an upturn in general economic activity putting more disposable income in consumers pockets, an increase in population/population entering the housing market, generally low interest rates, low initial monthly payments making homes more affordable, easy access to credit, and excessive risk-taking by mortgage borrowers; all of these tend to feed off of each other but the bubble doesn’t pop until the excessive risk-taking has spread throughout the housing system. When the demand decreases but the supply increases it results in a fall of prices(causes the bubble to
The national bureau of economic research dates the Great Recession from December 2007 to June 2009, lasting a total of eighteen months, making it known as the longest recession since the Great Depression. As the loss of wealth decreased consumer spending we experienced extensive job loss, “In 2008 and 2009, the U.S. labor market lost 8.4 million jobs, or 6.1% of all payroll employment” (Working America). Causes of the Great Recession include the bursting of the housing bubble, rising inequality, the loosening of bank lending rules and the corresponding rise in consumer debt, and the rise of mortgage securitization with too little regulatory oversight. …show more content…
Alone the housing burst rocked the banking system nearly causing a complete economic meltdown. “The value of real estate owned by U.S. households fell by nearly $6 trillion”(FiveThirtyEight). Typically the housing market is not susceptible to a pricing bubble. The housing bubble began primarily by an increase in demand, this occurs because of an upturn in general economic activity putting more disposable income in consumers pockets, an increase in population/population entering the housing market, generally low interest rates, low initial monthly payments making homes more affordable, easy access to credit, and excessive risk-taking by mortgage borrowers; all of these tend to feed off of each other but the bubble doesn’t pop until the excessive risk-taking has spread throughout the housing system. When the demand decreases but the supply increases it results in a fall of prices(causes the bubble to