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Great Recession

The Great Recession was a severe global economic downturn that began in 2007 and lasted until 2009, triggered by the collapse of the U.S. housing market and the subsequent financial crisis. It was marked by significant declines in consumer wealth, high unemployment, and widespread business failures. The Great Recession led to major economic reforms, including stricter financial regulations, government bailouts, and unprecedented monetary policy interventions by central banks.

Example

The U.S. experienced a housing market crash in 2007, leading to the failure of major financial institutions and triggering the Great Recession, which saw GDP shrink and unemployment rise sharply.

Key points

• A global economic downturn from 2007 to 2009, sparked by the U.S. housing market crash.

• Characterized by financial instability, high unemployment, and government bailouts.

• Led to significant regulatory reforms and central bank interventions.

Quick Answers to Curious Questions

The collapse of the U.S. housing market, excessive risk-taking by banks, and the spread of subprime mortgages triggered a global financial crisis.

Responses included financial bailouts, stimulus packages, regulatory reforms, and aggressive monetary policies, such as low interest rates and quantitative easing.

It led to lasting changes in financial regulation, increased scrutiny of banking practices, and heightened awareness of systemic risks in global markets.