Essay about The Impact Of Economic Disaster On The Economy

1266 Words Nov 14th, 2016 6 Pages
This, in essence, is the period in an economy that experienced a recessed kind of growth, followed by stagnation. The US experienced this situational change in business in December 2007 and was not a good sight to behold. The economy downturn was followed by high-end unemployment rates whereby; most people became jobless since the business cycle was completely retrogressive (Baker & Bernstein, 2014). The output factor in the market system also fell, and the government tried ways by which it could curb the situation, but it was, unfortunately, disabled (Arestis and Elias, 2010, pg. 266). It has been properly assayed that this particular economic disaster was more than a recession because a normal recession is reciprocative of the inputs of expansionary policies like the ones the government was trying to instill. If an expansionary policy is applied within a recession period, it is supposed to work and bring the graph back to its normal output trend, but in U.S this was not the case (Seefeldt, Graham, Abner, & Smiley, 2013).
There are a number of hypotheses as to why this crisis occurred that try to explain to us why this economic nightmare took place in the US. One of the hypotheses is spelled out below. The Structural Stagnation hypothesis tries to connect the economic loom in America with the immediate structural problems that could be as a result of globalization. Economists have relayed to us that this hypothesis regarding the macro economy, could be classified as either…

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