Global Financial Crisis - Essay Example

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Global Financial Crisis

Many professionals and experts around the world believe that a true economic recession can only be confirmed if GDP (Gross Domestic Product) growth is negative for a period of two or more consecutive quarters.
The roots of a recession and its true starting point actually rest in the several quarters of positive but slowing growth before the recession cycle really begins. While the "two quarter" definition is accepted globally, many economists have trouble supporting it completely as it does not consider other important economic change variables. For instance, current national unemployment rates or consumer confidence and spending levels are all a part of the economic system and must be taken into account when defining a recession and its attributes.
An economic recession is primarily attributed to the actions taken to control the money supply in an economy. The Central Bank is the agency responsible for maintaining the delicate balance between money supply, interest rates, and inflation. When this delicate balance is tipped, the economy is forced to correct itself.
In an environment where inflation is prevalent, people tend to cut out things like leis ...
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Summary

The Ex- President of the United States Ronald Reagan once said recession is when a neighbor loses his job; depression is when you lose yours. The biggest point of concern today is the global financial crisis or recession. The economic meltdown has caught us all wrong footed, the business organizations across the globe suffered huge amount of losses which resulted in pay cuts and slashing of jobs…
Author : rodrigueztrycia

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