The Great Recession of 2008 - 2062 Words

Abstract A recession is full-proof sign of declined activity within the economic environment. Many economists generally define the attributes of a recession are two consecutive quarters with declining GDP. Many factors contribute to an economys fall into a recession, but the major cause argued is inflation. As individuals or even businesses try to cut costs and spending this causes GDP to decline, unemployment rate can rise due to less spending which can be one of the combined factors when an economy falls into a recession. Inflation is the general rise in prices of goods and services over a period of time. Inflation can happen for reasons such as higher energy and production costs and that includes governmental debt. Great†¦show more content†¦However, Sweden and the United States are also significant trading partners, with the U.S. spending less and losing more jobs. As demand fell so did Sweden’s export contribution to its GDP, thus spiraling Sweden into a recession. Key interest rates began to fall in Sweden same as in the United States due to the global financial meltdown. â€Å"As the demand for loans diminish, interest rates tend to decline as well† (Schiller, 2010). Dissimilarities of U.S. Recession and Other Nations Although, Japan and Sweden had few similarities with those of the United States during the Great Recession, there were dissimilarities that displayed the U.S. failure to achieve full employment GDP and other factors. †¢ Japan’s unemployment rate of about 4% opposed to the U.S. unemployment rate of close to 10%. Even the financial debt to GDP ration is an advantage, and debt in the private sector has not increased unlike the U.S. and European countries, (Time, 2009). In addition, since Japan is a huge exporter and with the U.S. demand going downward, the international balances and growth declined especially as the dollar value dropped and the yen surged. †¢ Unlike the United States, Sweden took a double hit as weak international demand for its products and interest rates at home – GDP contracted by 0.4% down, according to Sweden Real Estate (2010). Sweden’s home prices keep rising while the U.S. home prices had plummeted.Show MoreRelatedThe Great Rec ession Of 20081123 Words   |  5 Pages The Great Recession of 2008 Debra Turner ECON 102 Professor, Shahrokh American Public University September 26, 2015 â€Æ' The Great Recession of 2008 Recession is a significant decline in real GDP, real income, employment, industrial production, and wholesale/retail sales, which last more than a few months. (Economic recession, n.d.) 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