Economy

12 Pages 3070 Words

Research shows that economies have grown, and in most cases at unprecedented speeds. Adversely every so often we’ve experienced the opposite scenario where our economies start plummeting downward losing economic stability and consumer confidence. These unexpected changes in economy are known as expansions and recessions. By popular rule, the beginning of a recession is defined as the first of two consecutive quarters of decline in real gross domestic product, and by analogy the end of a recession is marked by the first of two consecutive quarters of gross domestic product growth. Each recession has exemplified an array of different factors, components, and trends. Economists have followed each recession and analyzed them by the same economic components, thus allowing us the ability to compare their similarities and differences. In being able to compare recessions to one another, economists are able to better understand and predict what will happen in forthcoming recessions. As of March 2001 the United States as been wedged in a recession. This unstable period has left many with doubt in our economy as well as many questions as to the faith of our economy’s future. The best way to answer questions of this sort is to research the trends and components of the current recession with those of our past. My research of the two recessions concludes that the 2001-2002 recession should continue to follow the patterns of the 1990-91 recession, resulting in a strong but slow recovery. We can conclude this by examining a handful of leading economic indicators which are discussed thoroughly in the following pages
Economic Indicators
The best way to compare recessions is by looking at a handful of economic indicators. The indicators to compare should include: duration, diffusion, employment rates, index of industrial production, manufacturing capacity utilization, unemployment rates, Gross Domestic Product, and Personal income less tr...