The Great Recession
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The Good:
FED, as World's Lender of Last Resort, Bought Time.

The Bad 
Excesses Intensified
risk taking, corporate debt including junk,
financial engineering,
misallocation of resources, playing moral hazard game...

Political Polarity
has limited fiscal policy to the political with little
investment for increase productivity.

Updated 7/7/22   Please Share

Quick Notes Recession Encyclopedia
I. Types of Recessions         
II. Was The Great Recession a Balance Sheet Recession?

III. Conditions Associated with a Valance Sheet Recession
IV. Causes of the Great Recession from Quick Notes
V. Financial Bailout and Recovery
VI. Legacy of Great Recession 9/14/15
VII. Extensive Study from Wiki   
VIII. Most Severe US Recessions 2p 
IX. Wiki List of U.S. Recessions
X. Subprime Mortgage Bundling

XI. Financial Crisis Course Materials
XII. Photo Essay

What You Should Know About Work

Thanks   W. Antoniotti 

Cycle Analysis

Fed's Coronavirus Response

Japan’s Lost Decade Vs. US Great Recession

U.S. Economic Normality 1945-2015  p 2

International Normality Adjustments

Market Bubbles

Great Recession in Perspective

World Changed, Good Jobs Gone  

History of Financial Crises, 1870-2014

Recommended Readings

Unintended Consequences
of Federal Bailouts

Part I: What if Chrysler was not bailed out in 1980?

Part II: What if LTCM Was Not Rescued?

Part III: The Great Financial Crisis

Reconstructing the Great Recession

1. The Persistent Effects of the Great Recession

2. The Persistent Effects of the Great Recession

3. The Return on Safe and Liquid Assets

I. Types of Recessions
    A. Inventory Recession Excessive optimism causes inventories
        to over expand and eventually they must be worked down causing
        a recession. Computers have made easier to track inventory and
        made this type of recessions less likely. 
Endogenous Shock is not foreseen by economic models.
        1. Politics of oil caused recent recessions.
            a. 1973
Arab-Israeli war lead to Oil Embargo causing recession.
            b. 1979
 Iranian revolution lead to second oil embargo causing early 1980's recession.
1990 Iraqi invasion of Kuwait led to high oil prices which was a factor.
            d. 2002 American invasion of Iraq lead to high oil prices but  no recession.
        2. See
Whose Afraid of Big Bad Oil

   C. Rolling Recession Downturn is limited to areas or sectors of the economy. 
        a. Economic activity eventually increases but by then other areas and sectors
            are in recession. 
        b. International competition has increased the occurrence of this type of recession as sectors
            such as steel, autos, and recently computers have been affected.
    D Balance sheet recession
         1. Characteristics
             a. "A balance sheet recession is a particular type of
recession driven by the high
                   levels of private sector debt (i.e., the credit cycle) rather than fluctuations in
                   the business [inventory] cycle."
             b. "Private sector behavior towards saving (i.e., paying down debt) rather than lowering
                   consumer consumption and business investment and slowing the economy"
         2. The term
balance sheet derives from an accounting equation that holds assets must
              always equal the sum of liabilities plus equity. If asset prices fall below the value of the
              debt incurred to purchase them, then the equity must be negative, meaning the consumer
              or business is insolvent. Until it regains solvency, the entity will focus on debt repayment."
         3. Examples
             a. US 1837
             b. US 1873 first great
             c. US 1890
             d. US 1930-33
             e. Japan's 1990 decade of recession
                  See The Holy Grail Recession
    E. Business Cycle Theory  four 4 min. videos
        1. Monetarism
        2. Keynesian
        3. Real Business Cycle
        4. Austrian
        5. The Great Recession
   F. List of U.S. Recessions
   G. Most Severe US Recessions
   H. Market Bubbles
The Great Real Estate Bubble – Explained
      Case-Shiller Home Price Index – 1995 Baseline

  II Was The Great Recession a Balance Sheet Recession?

   A. Why this is important
          1. Balance sheet recessions are infrequent, severe, long-lasting
          2. Last in U.S. was The Great Depression
          3. Judging society's attempts to end them requires this determination just as judging
               the success of a doctor recommended medication to cure a headache requires
               knowing it was the difficult to cure Migraine Headache.

    B. Economist Paul Krugman feels the financial crisis ..."was one manifestation of a
         broader problem... associated with a "balance sheet recession." [4]

    C. A second example is provided by Economist Richard Koo who wrote that Japan's
         "Great Recession" that began in 1990 was a "balance sheet recession."  

    D. Readings   
         1. Richard Koo thoughts on a Balance Sheet Recession
         2. Koo’s wrongheaded views on the Great Depression ..

Free Political Book Summaries
Presidential Courage
Brave Leaders and How They Changed America 1789-1989, M. Beschloss,

Presidential Politics Party Politics and Presidential Elections 1788 to 2012 edited by W. Antoniotti

Thomas Jefferson The Art of Power, 2012 J. Meacham

Second Chance Three Presidents and the Crisis of America Superpower by Z.Brzezinski








Top 10 Recent Financial Crises often lead to local recessions which sometimes roll around the world.

10. The Panic of 1907: Fourth so-called ”panic”  in 34 years.
  9. The Mexican Peso Crisis 1994
  8. Argentine economic crisis 1999 Printing didn't help
  7. German hyperinflation 1918-24 Printing devalued WW1 debt    
  6. Souk Al-Manakh - 1982 Try not to use post dated to buy stocks
  5. Black Monday - 1987 23% drop in a single day black swan
  4. Russian financial crisis 1998 Devaluation of the ruble and
      cancellation of debt is never good for a local stock market
  3. East Asian financial crisis - 1997 aka the Asian Contagion
  2. Black Tuesday 1929
  1. 1973 Oil Crisis — Big energy increases cause
      Source Top 10 Financial Crises | The Big Picture

Source What We Know About Financial Bubbles WSJ 9/22/17

American Dynasty Aristocracy, Fortune, and the Politics of Deceit in the House of Bush, by K. Phillips
See Welcome the Hackocracy a look at Bush 2's appointments that made a difference.

Don't Know Much About History Everything You Need To Know About American History But Never Learned by K. C. Davis

Education and Income Inequality ch 21 The Age of Turbulence, Adventures in a New World, by A. Greenspan

Hoodwinked  An Economic Hit Man Reveals Why the World Financial Markets Imploded--and What We Need to Do to Remake Them, J. Perkins

How the West Was Lost Fifty Years of Economic Folly--and the Stark Choices Ahead, D. Moyo view 8 Minute Video   and 43 Minute Vide



Number and Severity of Financial Crises Are Increasing

III. Conditions Associated With Balance Sheet Recession
     A. Over Supply of Investable Funds Finances Asset Bubbles
     B. 19th century England grew rich with much going to the upper class
           who invested it locally, in empire and in the U.S. (land railroads, western
     C. Easy money policies by governments
         1 . Federal Reserve created funds beginning in 2002 and 2013 were borrowed by the wealth to invest in many asset markets.
         2. A problem arose when tightening in 2004 didn't work as foreign investors
             were eager to use savings to invest in the U.S.
         3. Ben B. did successfully sell FED's toxic assets bought with created  money
             to provide liquidity to  panicked financial markets treeing to survive The Great
             Recession to avoid the Great Recession from turning into Great Depression III.

Image result for Great Recession GDP recovery    

IV. The Great Recession from Quick Notes
The Great Moderation of the mid 1980's to mid 2000's preceded the Great Recession
           1. It enhanced the psychology effect of the steep slowdown..
           2. 9/11 got the century off to a terrible start.
           3. It fostered Structured Investments Vehicles which remove perceived risk and created an unstable
               financial/credits system with  extreme optimism and panic in bad times.
               Think derivatives, securitization, credit default  swaps managed by banks and
               hedge funds with no skin in the game. U.S. Economic Normality 1945 -2015

   B. A change in philosophy

          1. In 1980's, U.S. and England return to conservative government business deregulation
              which was in response to the liberal induced safety-net expansion of the 60's and 70's,
              which had upset many voters.  This change was the most recent of many such

              US political cycle changes which began with the 1800 presidential election. It signified a
              change from a strong federal government advocated by Federalists Washington, Adams
              and Hamilton lost out to the limited central government state's right politics of Hamiltonian
              Republicans. Think Great Society and lax regulation.
          2. In 1980's, major investments banks went public creating the need to balance client funds
               with investor's funds.
          3 .1980's, accounting standard began to decline as accountancy firms struggled to balance
               their commitment to high audit standards against the desire to grow their burgeoning
               consultancy practices. Think off balance items allowed and Arthur Anderson scandal.
           4. Home Equity Loans replaced many home improvement loans as many used their home equity
               to enhance current consumer spending rather than as retirement savings.
Think fewer
               prepared for retirement.

           5. Reverse mortgages lowers savings of the elderly. Think less inheritance for their children,
           6. Failed Regulation
               a. In 1998 ,Greenspan. Rubin and Levii stop
US Congress from regulation the OTC_derivatives_market.

In 1999, the Gramm, Leach, Bliley_Act  more than repealed Glass-Steagall Great Depression Act, which
                   had limited systemic financial risk, was repealed by a majority of Republicans and signed by President Clinton.
Five Bad Bush/Clinton Policies enhanced the Great Recession.
           7. In 2006, FASB required housing assets be mark-to-market by financial institution.
               This action resulted from a 1991 Government Accounting Office (GAO) caused by a recent
                Savings and Loan Crisis.
   C. From Financial Crisis to Recession to Great Recession
           1. Financial crisis of 2007-9 was tamed by the Federal Reserve.
           2. The 2008-9 recession was tamed by monetary and fiscal policy.
           3. European financial and economic instability plus austerity measures
               slowed not only her own recovery but also the world recovery and
               added to a developing long-term secular slow down in wage growth
               for all but the very, very, very wealthy.
          4. The Great Recession Recovery Has Varied Around The World
D. Seven Stages of Great Recession from The Shifts and the Shocks by Martin Wolf
          1. More complex unstable credits system evolved. It creates extreme optimism in good
               times and panic in bad times. Think derivatives, securitization, credit default swaps,
               and managed hedge funds.
           2. Emerging countries began saving export generated Dollars, Yens, Pounds, and Euros
               because the 1990's Asian Crisis had depleted their foreign currency reserves.
               Foreign credit from high income countries financed economic growth.
          3. Savings Glut led to secular stagnation.
              a. Emerging countries like China built up a large trade surplus .
              b. Private sector of high income countries like Germany and Japan's saved much more.
                  Rebuilding East Germany and the Asian 1990's credit crisis were Minsky moments.
              c. Commodity exporters, especially oil exporter, saved more as indicated by their increased trade surplus.
d. U.S. nonfinancial sectored saved high globalization profits because of
                   1 expected weak demand
                   2 fewer domestic investment opportunity.
              e. With propensity to save up and propensities to invest down,  low long-term real interest rates indicated a savings glut.
              f. As expected,  long-lived asset prices increased, especially real-estate.
              g. The savings glut also leads to secular stagnation and negative long term real interest rates.
         4. Current Accounts Deficits in wealthy countries took up the excesses as central banks fulfilled
              their mandate to maximize employment within reasonable inflation targets. This meant easy money,
              low interest rates and debt, carloads of debt. This task was made more difficult as the a dreary
              investment existed when more corporate savings were needed to solidify employee pension funds.
              Investment in housing plus increased consumer spending in the US, UK and Southern Europe
              soaked up the trade surplus and balanced world monetary flows.
         5. Bank deregulation provided an easy conduit to soak up the easy credit provided by
             central banks. Households borrowed the funds, investors ate-up the securities created and
             insured by creative financial instruments which few understood. Fraud, near fraud and data
             manipulation exploded. Leverage rose dramatically as modern economic and financial theory
             created regulators and politicians who were complacent and often captured by those they
         6. Poor pre-crisis management resulted as politicians and their economic advisors lacked
             understanding, especially as to the extent of possible contagion.
Political, intellectual
             and bureaucratic resistance limited quick action, especially in areas requiring cooperation.
             While a depression was avoided in all but southern Europe, economic growth slowed for years.
7. Post crisis management relied to heavily on monetary policy as fiscal austerity to control
             government debt  flourished everywhere though less in the US than in Southern Europe.

     E. Major Causes of the Great Recession
         1. A global savings glut and associated global imbalances.
         2. Expansionary monetary policy that ignored asset prices and extensive credit.
         3. Unstable financial system
         4. Inadequate government regulation
         5. Using homes as ATM machines
not home buying fervor more to blame housing crisis
  F. Causes of the Financial Crisis
        1.  Market Fundamentalism and laissez-faire/free market lowered regulation policies
             beginning in 1980 and continuing cause serious problems.
         2. Financial Product Innovation
made asset purchases easier and fostered the belief that
             risk avoidance was possible. Examples: Collateralized Debt Obligations, Asset Backed Securities,
             Commercial Mortgaged Securities, Residential Mortgaged Backed Securities
G. Congressional Findings
      1. Majority report (signed by 6 members) which found that the primary cause of the crisis was poor
              financial corporation governance with insufficient (and ineffective) government regulation and supervision
Minority report focused on a list of 10 symptoms of the crisis* and identifying "shock and panic" as the root cause
Majority Report 2
concludes government housing policies were the primary cause
      H. Other Causes
           1. Innovation Cycle begins excessive growth that crashes (RR, computers, bio-technology?)
           2. Greed
 I. Videos
           1. Causes of the Great Recession
           2. An Historical Perspective on the Crisis of 07-08
3. Fiderer When Hank Paulson Launched The Big Lie- 9/15/08

           4. After the Financial Crisis: How to Tell the Forest from the Trees

V. Financial Bailouts and Recovery

   A. Banking Oligarchs Did OK

   B. Government Approaches Varied

  Economic Policy Policy Result



Federal Fiscal

Federal Austerity

Bank Stress Test Unemployment % 2009 - 14 Jobs
GDP Growth
 from Trough
US Yes, Quickly Expansionary Little Some Creditable 10 5.7 10.7 m 8%+
England Yes Quickly Expansionary Some Late 10 6.2 2.0 m 3%+
Europe Zone Very Late (2015) Concretionary Much Little Creditable 7 11.42 -3.5 m -1.5%

U.S. Germany and UK Lead the Recovery

US now has about $10,000/head more than Germany.


1Cost of Great Recession were much higher. US FED Profit of 100 billion in 2014 were up from 47 in 2009 with and 420 billion 2010-14.

2High among young some of who are moving north out of Southern Europe


See Treasury Financial Analysis of Great Recession in Charts

US European Economies And The Great Recession
from the St Louis Fed 3/14/17

Frontline: The Great Financial Crisis of 2008 Lack of Criminal Prosecution video

Some ECB Members Want More Easing, ECB Needed More Easing


Editor's Note: Using total GDP US leads and Germany plus England are a little behind.


Eurozone Catching Years

   C. Government Expansionary Fiscal Policy

  Government Spending Contracted

Foreigners Still Buying Treasuries


Slow Recovery

Recent Recession Recoveries






Impact of Great Recession from SF FED


D. Financial Credit Cycle Worsens vs. Business Cycle

Editors Note: As of 10/20/15 much has been done to prevent future financial crisis but these efforts will fail because greed and politics change very slowly. Thankfully for many, Western civilization has progressed to the point where even during poor times well-being is maintained at a reasonable level.

See Will Stagnate Median Income Hurt Our Children?


     E. Recovery Was Historically Slow Though Not For a Balance Sheet Recession
Chart-book of the Great Recession 7/10/18 see 10 YEARS AFTER THE CRISIS for more data
          2. Chart Book: Tracking the Recovery From the Pandemic
          3. Econ Talk Podcast Recession, Stagnation, and Monetary Policy EconTalk Podcast 1/9/17
Mark Blyth: After the Financial Crisis: How to Tell the Forest from the Trees 57 min. video
Have Big Banks Gotten Safer?  Brookings' Report Fall 2016

     F.  Some Worry Because     

           1. Debt Continues to Grow because of low Interest Rates

2. Housing Prices Better


                                                       3. Wealth Overvalued in Relation to GDP   Source   See M 2/28/17 Economic News

4. A Little More Leverage


VI.  Legacy of Great Recession


Unlike Corporate Bailouts, Coronavirus Cost (in Billions)


Bailout Year Financial commitment Disbursements Profit/loss

Railroad industry




$25.3  in grants and loan guarantees




-$20.4 billion


Lockheed Martin




$1.62  in loan guarantees




$197 million






$4.98  in loan guarantees


- $1.03 billion
Farm credit system




$9.28 in direct loans




Likely made a profit



Steel /oil/gas industry

1999 $6.28  in loan guarantees - Likely made a profit

Airline industry

2001 $22.1 in grants and loan guarantees  $6.96  -$3.58 billion

Fannie Mae and Freddie Mac

2008 $976  in capital injections/stock purchases $234 $123 billion



Financial sector

2008 $854  in capital injections/stock purchases $382 $32.5 billion

Money market mutual funds

2008 $3.67 in guaranteed deposits - $1.43 billion

Auto industry

2008/09 $128  in TARP funds and a separate loan $107 -$14.9 billion
All figures are in 2020 dollars


 A. Chart Book 9/18


     C. Nine Lessons From the Global Financial Crisis  9/13/18

     D. 10 Things People Still Get Wrong About the Financial Crisis  9/14/18

     E. What We Should Have Learned From 2008

     F. Financial System Report on Bank Structure

     G. Financial Crisis Still Empowering Far-Right

VII. Extensive study from Wiki
A. Introduction

          1. Overview

          2. Narratives

     B. Housing market  found itself in a

         1.bursting bubble causing foreclosures

         2, Causes of bubble due to Subprime lending

Mortgage underwriting with Mortgage fraud

         4. Down payments created negative equity

         5. Predatory lending


 C. Risk-taking behavior increased encouraging by
      1.  Consumer excessive borrowing causing
         a. excessive private debt levels
         b. home equity extraction

         c. housing speculation enhance
         d. pro-cyclical human nature

      2. Corporate risk-taking and leverage
        a. Net capital rule change increased lending &
        b. Perverse incentives encouraged malfeasance.
        c. See K and M


    D. Financial market factors

        1. Financial product innovation

        2. Inaccurate credit ratings

        3. Lack of transparency and
            independent modeling

        4. Off-balance-sheet financing

        5. Regulatory avoidance 

        6. Financial sector concentration


    E. Governmental policies

         1. Failure to regulate non-depository banking

         2. Affordable housing policies

         3. Government deregulation

         4. See L and M           



     F. Macroeconomic conditions

         1. Interest rates

         2. Globalization and Trade deficits

         3. Chinese mercantilism

         4. End of a long wave

         5. Paradoxes of thrift and

Capital market pressures affected private capital and search for yield

   H. Shadow banking system collapsed This parallel banking system was significant and had little run protection.

    I. Mortgage compensation model,  executive pay/bonuses

    J. Regulation and deregulation

    K. Conflicts of interest and lobbying of  business leaders

    L. Other factors

        1. Commodity price volatility

        2. Inaccurate economic forecasting

        3. Monetary expansion, uncertainty

        4. Over-leveraged financial products

        5. Credit creation as a cause

        6. Oil prices

        7. Emigration

        8. Overproduction

        9. Declining Births Lowered Demand

 M. References

        1. Books

        2. External links

Last Chapter  Visit Business Education Bookstore
Class Discussion Questions Table of Contents
Homework Questions Economics Free Stuff

 VIII. Wiki List of U.S. Recessions Note: I-phone display is poor.

Name Dates [nb 2] Characteristics
Panic of 1785 1785–1788 The panic of 1785, which lasted until 1788, ended the business boom that followed the American Revolution. The causes of the crisis lay in the overexpansion and debts incurred after the victory at Yorktown, a postwar deflation, competition in the manufacturing sector from Britain, and lack of adequate credit and a sound currency. The downturn was exacerbated by the absence of any significant interstate trade. Other factors were the British refusal to conclude a commercial treaty, and actual and pending defaults among debtor groups. The panic among business and propertied groups led to the demand for a stronger federal government.


Copper Panic of 1789 17961789–1793 Loss of confidence in copper coins due to debasement and counterfeiting led to commercial freeze up that halted the economy of several northern States and was not alleviated until the introduction of new paper money to restore confidence.


Panic of 1797 17961796–1799 Just as a land speculation bubble was bursting, deflation from the Bank of England (which was facing insolvency because of the cost of Great Britain's involvement in the French Revolutionary Wars) crossed to North America and disrupted commercial and real estate markets in the United States and the Caribbean, and caused a major financial panic.[10] Prosperity continued in the south, but economic activity was stagnant in the north for three years. The young United States engaged in the Quasi-War with France.[8]


1802–1804 recession 18021802–1804 A boom of war-time activity led to a decline after the Peace of Amiens ended the war between the United Kingdom and France. Commodity prices fell dramatically. Trade was disrupted by pirates, leading to the First Barbary War.[8]


Depression of 1807 18071807–1810 The Embargo Act of 1807 was passed by the United States Congress under President Thomas Jefferson as tensions increased with the United Kingdom. Along with trade restrictions imposed by the British, shipping-related industries were hard hit. The Federalists fought the embargo and allowed smuggling to take place in New England. Trade volumes, commodity prices and securities prices all began to fall. Macon's Bill Number 2 ended the embargoes in May 1810, and a recovery started.[8]


1812 recession 18121812 The United States entered a brief recession at the beginning of 1812. The decline was brief primarily because the United States soon increased production to fight the War of 1812, which began June 18, 1812.[11]


1815–21 depression 18151815–1821 Shortly after the war ended on March 23, 1815, the United States entered a period of financial panic as bank notes rapidly depreciated because of inflation following the war. The 1815 panic was followed by several years of mild depression, and then a major financial crisis – the Panic of 1819, which featured widespread foreclosures, bank failures, unemployment, a collapse in real estate prices, and a slump in agriculture and manufacturing.[8]


1822–1823 recession 18221822–1823 After only a mild recovery following the lengthy 1815–21 depression, commodity prices hit a peak in March 1822 and began to fall. Many businesses failed, unemployment rose and an increase in imports worsened the trade balance.[8]


1825–1826 recession 18251825–1826 The Panic of 1825, a stock crash following a bubble of speculative investments in Latin America led to a decline in business activity in the United States and England. The recession coincided with a major panic, the date of which may be more easily determined than general cycle changes associated with other recessions.[7]


1828–1829 recession 18281828–1829 In 1826, England forbade the United States to trade with English colonies, and in 1827, the United States adopted a counter-prohibition. Trade declined, just as credit became tight for manufacturers in New England.[8]


1833–34 recession 18331833–1834 The United States' economy declined moderately in 1833–34. News accounts of the time confirm the slowdown. The subsequent expansion was driven by land speculation.[12]


US recessions, Free Banking Era to the Great Depression
Name Business activity

 [nb 3]

Trade & industrial activity [nb 3] Characteristics
1836–1838 recession -32.8% A sharp downturn in the American economy was caused by bank failures and lack of confidence in the paper currency. Speculation markets were greatly affected when American banks stopped payment in specie (gold and silver coinage).[3][13] Over 600 banks failed in this period. In the South, the cotton market completely collapsed.[8] See: Panic of 1837
late 1839–late 1843 recession -34.3% This was one of the longest and deepest depressions. It was a period of pronounced deflation and massive default on debt. The Cleveland Trust Company Index showed the economy spent 68 months below its trend and only 9 months above it. The Index declined 34.3% during this depression.[14]
1845–late 1846 recession −5.9% This recession was mild enough that it may have only been a slowdown in the growth cycle. One theory holds that this would have been a recession, except the United States began to gear up for the Mexican–American War, which began April 25, 1846.[15]
1847–48 recession −19.7% The Cleveland Trust Company Index declined 19.7% during 1847 and 1848. It is associated with a financial crisis in Great Britain.[14][16]
1853–54 recession −18.4% Interest rates rose in this period, contributing to a decrease in railroad investment. Security prices fell during this period. With the exception of falling business investment there is little evidence of contraction in this period.[3]
Panic of 1857 −23.1% Failure of the Ohio Life Insurance and Trust Company burst a European speculative bubble in United States' railroads and caused a loss of confidence in American banks. Over 5,000 businesses failed within the first year of the Panic, and unemployment was accompanied by protest meetings in urban areas. This is the earliest recession to which the NBER assigns specific months (rather than years) for the peak and trough.[5][7][17]
1860–61 recession −14.5% There was a recession before the American Civil War, which began April 12, 1861. Zarnowitz says the data generally show a contraction occurred in this period, but it was quite mild.[14] A financial panic was narrowly averted in 1860 by the first use of clearing house certificates between banks.[8]
1865–67 recession −23.8% The American Civil War ended in April 1865, and the country entered a lengthy period of general deflation that lasted until 1896. The United States occasionally experienced periods of recession during the Reconstruction era. Production increased in the years following the Civil War, but the country still had financial difficulties.[14] The post-war period coincided with a period of some international financial instability.
1869–70 recession −9.7% A few years after the Civil War, a short recession occurred. It was unusual since it came amid a period when railroad investment was greatly accelerating, even producing the First Transcontinental Railroad. The railroads built in this period opened up the interior of the country, giving birth to the Farmers' movement. The recession may be explained partly by ongoing financial difficulties following the war, which discouraged businesses from building up inventories.[14] Several months into the recession, there was a major financial panic.
Panic of 1873 and the Long Depression −33.6% (−27.3%) [nb 3] Economic problems in Europe prompted the failure of Jay Cooke & Company, the largest bank in the United States, which burst the post-Civil War speculative bubble. The Coinage Act of 1873 also contributed by immediately depressing the price of silver, which hurt North American mining interests.[18] The deflation and wage cuts of the era led to labor turmoil, such as the Great Railroad Strike of 1877. In 1879, the United States returned to the gold standard with the Specie Payment Resumption Act. This is the longest period of economic contraction recognized by the NBER. The Long Depression is sometimes held to be the entire period from 1873–96.[19][20]
1882–85 recession −32.8% −24.6% Like the Long Depression that preceded it, the recession of 1882–85 was more of a price depression than a production depression. From 1879 to 1882, there had been a boom in railroad construction which came to an end, resulting in a decline in both railroad construction and in related industries, particularly iron and steel.[21] A major economic event during the recession was the Panic of 1884.
1887–88 recession −14.6% −8.2% Investments in railroads and buildings weakened during this period. This slowdown was so mild that it is not always considered a recession. Contemporary accounts apparently indicate it was considered a slight recession.[22]
1890–91 recession −22.1% −11.7% Although shorter than the recession in 1887–88 and still modest, a slowdown in 1890–91 was somewhat more pronounced than the preceding recession. International monetary disturbances are blamed for this recession, such as the Panic of 1890 in the United Kingdom.[22]
Panic of 1893 −37.3% −29.7% Failure of the United States Reading Railroad and withdrawal of European investment led to a stock market and banking collapse. This Panic was also precipitated in part by a run on the gold supply. The Treasury had to issue bonds to purchase enough gold. Profits, investment and income all fell, leading to political instability, the height of the U.S. populist movement and the Free Silver movement.[23]
Panic of 1896 −25.2% −20.8% The period of 1893–97 is seen as a generally depressed cycle that had a short spurt of growth in the middle, following the Panic of 1893. Production shrank and deflation reigned.[22]
1899–1900 recession −15.5% −8.8% This was a mild recession in the period of general growth beginning after 1897. Evidence for a recession in this period does not show up in some annual data series.[22]
1902–04 recession −16.2% −17.1% Though not severe, this downturn lasted for nearly two years and saw a distinct decline in the national product. Industrial and commercial production both declined, albeit fairly modestly.[22] The recession came about a year after a 1901 stock crash.
Panic of 1907 −29.2% −31.0% A run on Knickerbocker Trust Company deposits on October 22, 1907, set events in motion that would lead to a severe monetary contraction. The fallout from the panic led to Congress creating the Federal Reserve System.[24]
Panic of 1910–1911 −14.7% −10.6% This was a mild but lengthy recession. The national product grew by less than 1%, and commercial activity and industrial activity declined. The period was also marked by deflation.[22]
Recession of 1913–1914 −25.9% −19.8% Productions and real income declined during this period and were not offset until the start of World War I increased demand.[22] Incidentally, the Federal Reserve Act was signed during this recession, creating the Federal Reserve System, the culmination of a sequence of events following the Panic of 1907.[24]
Post-World War I recession −24.5% −14.1% Severe hyperinflation in Europe took place over production in North America. This was a brief but very sharp recession and was caused by the end of wartime production, along with an influx of labor from returning troops. This, in turn, caused high unemployment.[25]
Depression of 1920–21 −38.1% −32.7% The 1921 recession began a mere 10 months after the post-World War I recession, as the economy continued working through the shift to a peacetime economy. The recession was short, but extremely painful. The year 1920 was the single most deflationary year in American history; production, however, did not fall as much as might be expected from the deflation. GNP may have declined between 2.5 and 7 percent, even as wholesale prices declined by 36.8%.[26] The economy had a strong recovery following the recession.[27]
1923–24 recession −25.4% −22.7% From the depression of 1920–21 until the Great Depression, an era dubbed the Roaring Twenties, the economy was generally expanding. Industrial production declined in 1923–24, but on the whole this was a mild recession.[22]
1926–27 recession −12.2% −10.0% This was an unusual and mild recession, thought to be caused largely because Henry Ford closed production in his factories for six months to switch from production of the Model T to the Model A. Charles P. Kindleberger says the period from 1925 to the start of the Great Depression is best thought of as a boom, and this minor recession just proof that the boom "was not general, uninterrupted or extensive".[28]
  Dates Peak unemploy­ment GDP decline (peak to trough) Characteristics
Great Depression 1929Aug 1929 –
Mar 1933
26.7−26.7% Stock markets crashed worldwide. A banking collapse took place in the United States. Extensive new tariffs and other factors contributed to an extremely deep depression. The United States did remain in a depression until World War II. In 1936, unemployment fell to 16.9%, but later returned to 19% in 1938 (near 1933 levels).


Recession of 1937–1938 1937May 1937 –
June 1938
03.4−18.2% The Recession of 1937 is only considered minor when compared to the Great Depression, but is otherwise among the worst recessions of the 20th century. Three explanations are offered for the recession: that tight fiscal policy from an attempt to balance the budget after the expansion of the New Deal caused recession, that tight monetary policy from the Federal Reserve caused the recession, or that declining profits for businesses led to a reduction in investment.[34]


Recession of 1945 1945Feb–Oct 1945 05.25.2%[33]
12.7−12.7% The decline in government spending at the end of World War II led to an enormous drop in gross domestic product, making this technically a recession. This was the result of demobilization and the shift from a wartime to peacetime economy. The post-war years were unusual in a number of ways (unemployment was never high) and this era may be considered a "sui generis end-of-the-war recession".[35]


Recession of 1949 1948Nov 1948 –
Oct 1949
(Oct 1949)
01.7−1.7% The 1948 recession was a brief economic downturn; forecasters of the time expected much worse, perhaps influenced by the poor economy in their recent lifetimes.[36] The recession also followed a period of monetary tightening.[30]


Recession of 1953 1953July 1953 –
May 1954
(Sep 1954)
02.6−2.6% After a post-Korean War inflationary period, more funds were transferred to national security. In 1951, the Federal Reserve reasserted its independence from the U.S. Treasury and in 1952, the Federal Reserve changed monetary policy to be more restrictive because of fears of further inflation or of a bubble forming.[30][37][38]


Recession of 1958 1957Aug 1957 –
April 1958
(July 1958)
03.1−3.7% Monetary policy was tightened during the two years preceding 1957, followed by an easing of policy at the end of 1957. The budget balance resulted in a change in budget surplus of 0.8% of GDP in 1957 to a budget deficit of 0.6% of GDP in 1958, and then to 2.6% of GDP in 1959.[30]


Recession of 1960–61 1960Apr 1960 –
Feb 1961
(May 1961)
01.6−1.6% Another primarily monetary recession occurred after the Federal Reserve began raising interest rates in 1959. The government switched from deficit (or 2.6% in 1959) to surplus (of 0.1% in 1960). When the economy emerged from this short recession, it began the second-longest period of growth in NBER history.[30] The Dow Jones Industrial Average (Dow) finally reached its lowest point on Feb. 20, 1961, about 4 weeks after President Kennedy was inaugurated.


Recession of 1969–70 1969Dec 1969 –
Nov 1970
(Dec 1970)
00.6−0.6% The relatively mild 1969 recession followed a lengthy expansion. At the end of the expansion, inflation was rising, possibly a result of increased deficits. This relatively mild recession coincided with an attempt to start closing the budget deficits of the Vietnam War (fiscal tightening) and the Federal Reserve raising interest rates (monetary tightening).[30]


1973–75 recession 1973Nov 1973 –
Mar 1975
(May 1975)
03.2−3.2% A quadrupling of oil prices by OPEC coupled with high government spending because of the Vietnam War led to stagflation in the United States.[39] The period was also marked by the 1973 oil crisis and the 1973–1974 stock market crash. The period is remarkable for rising unemployment coinciding with rising inflation.[40]


1980 recession 1980Jan–July 1980 7.8%
(July 1980)
02.2−2.2% The NBER considers a very short recession to have occurred in 1980, followed by a short period of growth and then a deep recession. Unemployment remained relatively elevated in between recessions. The recession began as the Federal Reserve, under Paul Volcker, raised interest rates dramatically to fight the inflation of the 1970s. The early '80s are sometimes referred to as a "double-dip" or "W-shaped" recession.[30][41]


Early 1980s recession 1981July 1981 –
Nov 1982
(Nov 1982)
02.7−2.7% The Iranian Revolution sharply increased the price of oil around the world in 1979, causing the 1979 energy crisis. This was caused by the new regime in power in Iran, which exported oil at inconsistent intervals and at a lower volume, forcing prices up. Tight monetary policy in the United States to control inflation led to another recession. The changes were made largely because of inflation carried over from the previous decade because of the 1973 oil crisis and the 1979 energy crisis.[42][43]


Early 1990s recession 1990July 1990 –
Mar 1991
(June 1992)
01.4−1.4% After the lengthy peacetime expansion of the 1980s, inflation began to increase and the Federal Reserve responded by raising interest rates from 1986 to 1989. This weakened but did not stop growth, but some combination of the subsequent 1990 oil price shock, the debt accumulation of the 1980s, and growing consumer pessimism combined with the weakened economy to produce a brief recession.[44][45][46]


Early 2000s recession 2001March 2001–Nov 2001 6.3%
(June 2003)
00.3−0.3% The 1990s were the longest period of growth in American history. The collapse of the speculative dot-com bubble, a fall in business outlays and investments, and the September 11th attacks,[47] brought the decade of growth to an end. Despite these major shocks, the recession was brief and shallow.[48] Without the September 11th attacks, the economy might have avoided recession altogether.[47


Great Recession 2007Dec 2007 – June 2009[49][50] 10.0%
(October 2009)[51]
03.9−4.3% The subprime mortgage crisis led to the collapse of the United States housing bubble. Falling housing-related assets contributed to a global financial crisis, even as oil and food prices soared. The crisis led to the failure or collapse of many of the United States' largest financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, City Bank and AIG, as well as a crisis in the automobile industry. The government responded with an unprecedented $700 billion bank bailout and $787 billion fiscal stimulus package. The National Bureau of Economic Research declared the end of this recession over a year after the end date.[52] The Dow Jones Industrial Average (Dow) finally reached its lowest point on March 9, 2009.[

X. Subprime Mortgage Bundling