ECON 1040 Lecture Notes - Lecture 11: Loanable Funds, The Recession, Monetary Policy
Document Summary
The great recession, great depression and great macroeconomic debates. The recession of 2008: officially from december 2007 to june 2009 was the longest recession since wwi, named the great recession because it is longer in length and deeper in effects than other recessions. In 2012 (recession officially over: real gdp was growing at a rate of less than 2, unemployment remained at 8, government tried to return growth to normal. The great depression: soooo much worse: statistics, economy contracted by 30% from 1929 to 1933. It was actually two separate recessions (1929 to 1933 and 1937 to 1938: most remarkable: prices across the economy fell throughout the decade, at the end of the 1930s, the price level was still 20% lower than 1929. Lower expected future income: ad decreases, 1929 1932: stock prices fell by almost 90, gov policy response, policymakers believed stock prices were too high, 1928 and 1929: gov reduced the money supply.
