The Great Recession

The United States grants the responsibility of officially determining when a recession begins and ends upon the National Bureau of Economic Research (NBER). Within the National Bureau of Economic Research their Business Cycle Dating Committee handles this job. The NBER has come to define this period of substantial economic decline as a recession. However, the official definition the NBER uses for recession is “a period between a peak and a trough where, a significant decline in economic activity spreads across the economy and can last from a few months to more than a year.”
The aforementioned decline in economic activity is determined through numerous forms of economic data that allow economists to clarify the state of the economy. But there
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Marking the end of the longest and deepest recession since World War II. The US economy entered into the recession in December 2007 and exited in June 2009, a total of 18 months. This recession is often labeled the Great Recession, not just for a record-breaking duration, but for the devastating effects on the economy. Due to the magnitude of this recession much time has been spent developing theories on what caused the US economy to dramatically decline. After sifting thought the available data I have come to believe that the recession of 2007-2009 started when the housing market burst. This caused a domino effect starting with the decline in consumer spending, which led to a near halt in business investment, a fall in GDP and, a drastic rise in …show more content…
The only other time unemployment was higher was during the 1981-1982 recession. This recession was caused by the rising oil prices during the regime switch in Iran and the Federal Reserve’s need to reign in inflation. During this time inflation reached 10.8% and had 3.6 percentage point increase. Or a 6.8 percentage point increase if you include the 1980 recession that “double-dipped.” The recession of 2007-2009 saw a 5.1 percentage point increase, which is yet another record the Great Recession set. By taking a look at the graph of unemployment rates. It becomes clear that the majority of the increase in unemployment took place after the first six months. It continued to escalate for 22 months, making this the longest period of increasing unemployment since the Great Depression. This is another abnormality since the unemployment tends to decline after one year. However in the previous recession of 1990-1991 and 2001 unemployment continued to rise for over a year. This could be presenting a new pattern where the economy has a greater response time in recovering

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