Documente Academic
Documente Profesional
Documente Cultură
2008 - 2009
WHAT IS RECESSION
A Recession is a contraction phase of the business cycle.
According to National Bureau of Economic Research (NBER)
– “significant decline in economic activity lasting more than a few
months, which is normally visible in real GDP, real income,
employment, industrial production, and wholesale-retail sales”.
Decline in a country's gross domestic product (GDP) growth for two or
more consecutive quarters of a year .
In economics, a recession is a general slowdown in economic
activity over a sustained period of time, or a business cycle
contraction.
Production as measured by Gross Domestic Product (GDP),
employment, investment spending, capacity utilization, household
incomes and business profits all fall during recessions.
WHAT CAUSES RECESSION
Higher levels of
unemployment
Decline in housing prices
Decline in the stock
market
Business expansion plans
being put on hold
Bankruptcies
Credit crunches
Foreclosures
What contributed
recession
United States housing market correction (a consequence of United States
housing bubbles) and sub prime mortgage crisis.
US economy accounts for 30 per cent of the world's GDP.
The value of houses dropping and the pension savings decimated on the
stock market.
Protracted credit crisis and "rampant inflation in commodities such as oil,
food and steel."
The 6.4% decline in spending during Q3 on non-durable goods, like
clothing and food, was the largest since 1950.
Increasing inflation led to higher interest rate.
– As a result borrowing loans and consumer spending stopped.
– People having low credit profile became defaulters.
– Easy liquidity started vanishing.
US shares fell into the red from their early gains after the NBER
announcement.
SUBPRIME CRISIS
0
Jun-05
Thousands
Sep-05
Dec-05
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
June 2005 – December 2008
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
NET CHANGE IN U.S. JOBS
100
102
104
106
108
110
112
114
n -0
Ja 7
b -0
e
F 7
rM -0
a 7
r -0
p
A 7
y -0
a
M 7
n -0
Ju 7
l -0
Ju 7
g -0
u
A 7
p -0
e
S 7
t -0
c
O 7
v -0
o
N 7
c -0
e
D 7
n -0
Ja 8
b -0
e
F 8
January 2007 - November 2008
rM -0
a 8
r -0
p
A 8
INDUSTRIAL PRODUCTION
y -0
a
M 8
n -0
Ju 8
l -0
Ju 8
g -0
u
A 8
p -0
e
S 8
t -0
c
O 8
v -0
o
N 8
LIST OF BANKRUPT
AIRLINES
Submitted By :
Utkarsh Sethi
&
Neeru Rawat