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The Federal Reserve was effective/successful in its management of the"Great Recession" - Essay Example
Finance & Accounting
Pages 10 (2510 words)
Name: Institution: Tutor: Course: Date: The Federal Reserve was successful in its management of the “Great Recession" Introduction In times of economic strains such as depressions, countries usually undergo a lot of stress in the management of their fiscal and monetary accounts…
However, a near reoccurrence of the same situation took place in the year 2008 when worldwide; all nations had difficult economic situations (Berton 254). At about the Great Depression period, the rate of the Real Gross Domestic Product began to decline at a rate of about 6% annually, and the monthly average number of jobs lost rose to about 750,000. This stunning turn of events led to the stunning application of stringent fiscal and monetary policies by the Federal Reserve so as to curtail the spread of the effects. In responding to the unusually large size of the fiscal stimulus, the Federal Reserve noted that this was in consistency to the severe downturn and limited ability for the usage of interest rates nearing zero. At such hard economic times, the government of the USA through the Federal Reserve is expected to employ necessary economic variables and measures such as fiscal and monetary policies to try and resolve the situation. To this end, I can argue that the Federal Reserve was successful or effective in the manner in which it managed the Great Depression. The table below shows the annual GDP rates of the USA for the period 1910 to 1960 with the depression period lying between 1929 to 1939 (Robbins 569). ...
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