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Recession

Principles of Economics

Macroeconomics News Report

Recession

Table of Content
Recession…………………………………………………………………………………...pg.3
Black Monday 1987………………………………………………………………………...pg.3
Recession in US History………………………………………………………………….pg.3-4
Current recession in the US………………………………………………………………pg.4-5
Definition of recession……………………………………………………………………...pg.5
Process of recession………………………………………………………………………...pg.6
Effect of recession………………………………………………………………………..pg.6-7
Solution of recession………………………………………………………………………..pg.7
Forecast…………………………………………………………………………………...pg.7-8
Impact of US recession on other countries…………………………………………………pg.8
Current News……………………………………………………………………………….pg.8
Conclusion………………………………………………………………………………….pg.8
References………………………………………………………………………………….pg.9

Recession
According to economist (www.economist.com), since 1854, the U.S.A. has encountered 32 cycles of expansions and contractions. The average of contraction is 17 months and 38 months of expansion. Since 1980 there were three periods considered recessions and eight periods of negative economic growth. The recession periods are: January-July 1980 and July 1981- November 1982 (2 years total), July 1990- March 1991 (8 months), November 2001- November 2002 (12 months). (http//www.nber.org/cycles/)
Black Monday 1987
The term "Black Monday" refers to the Monday on October 19, 1987 when the Dow Jones Industrial Average lost 22.6% and similar stock markets around the world dropped enormous percentages, making it one of the largest percentage declines to occur in the stock market for a single day. (http://www.woopidoo.com/glossary/black-monday/index.htm)
The international stock losses: Hong Kong lost 45.8%, Australia lost 41.8%, Spain lost 31% and UK lost 26.4%. There have not been found any clear reasons for the events on Black Monday. Soma economic analysts attribute the crash to human rationality and problems with economic equilibrium.
Some of the international stock losses...