A study of past recessions
http://www.nytimes.com/interactive/2009/01/26/business/economy/20090126-recessions-graphic.html
A very informative link which studies all the major recession(in US) since the great depression!
The theory of keynes's (keynesian economics) in combating recession which supports the circulation of money by goverment (bu buying or reducing rates) was titled not pragmatic as it virtually had no effect during the recession in 1960 till the economy recovered, was again endorsed in 1980 when Reagan reduced the regulations and introduced tax cut which increased the spending and it(increased spending) led to recovery the very next year.(In 1960 it had taken a lot of time to have effect).
The credit crunch in 1990 caused by the tight monetary policy (to combat the rising inflation) was again restored when Alan(then fed Chairman) cut the federal funds rate several times(sometimes boldly as Glen Hubbard puts it :) ).It was the same story(in combating) in 2001 when GDP falls though this time there were several other factors which caused it and as it can be seen keeping the rates low for too long had other repercussions.
And on the recent recession though several economies(globally) had reported a slight growth after a year long nightmare no one is sure if they would be able to sustain it.Though(it seems) there will be no respite for the unemployment in the near future every one wishes to believe that the worst part is over and the economy has rebounded.With the(US) government's budget estimate due next week there are some challenging and interesting times ahead for the Fed officials and the government and not to mention a very testing period for the banking industry.
A very informative link which studies all the major recession(in US) since the great depression!
The theory of keynes's (keynesian economics) in combating recession which supports the circulation of money by goverment (bu buying or reducing rates) was titled not pragmatic as it virtually had no effect during the recession in 1960 till the economy recovered, was again endorsed in 1980 when Reagan reduced the regulations and introduced tax cut which increased the spending and it(increased spending) led to recovery the very next year.(In 1960 it had taken a lot of time to have effect).
The credit crunch in 1990 caused by the tight monetary policy (to combat the rising inflation) was again restored when Alan(then fed Chairman) cut the federal funds rate several times(sometimes boldly as Glen Hubbard puts it :) ).It was the same story(in combating) in 2001 when GDP falls though this time there were several other factors which caused it and as it can be seen keeping the rates low for too long had other repercussions.
And on the recent recession though several economies(globally) had reported a slight growth after a year long nightmare no one is sure if they would be able to sustain it.Though(it seems) there will be no respite for the unemployment in the near future every one wishes to believe that the worst part is over and the economy has rebounded.With the(US) government's budget estimate due next week there are some challenging and interesting times ahead for the Fed officials and the government and not to mention a very testing period for the banking industry.
Also read this
http://www.nytimes.com/2009/08/22/business/economy/22fed.html?_r=1&8au&emc=au
http://www.nytimes.com/2009/08/22/business/economy/22fed.html?_r=1&8au&emc=au
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