Question

Discuss and Compare the Great Depression and the Great Recession of the 21st century.

Answer 1

The Great Recession of 2008-09 was the steepest U.S. recession since the Great Depression of the 1930’s. Key differences between the Great Depression and the 2008 US Recession are as follows:

--A stock market crash led to a reduction in expected income and tight monetary policy. Higher tax rates and a banking crisis then drove the economy into a depression – summarizes the main causes of the Great Depression of 1930's

A decline in housing prices and stock prices, plus a financial crisis, summarizes the main causes of the Great Recession in 2008

--A key difference between the Great Recession and the Great Depression is that the American government reduced taxes during the Great Recession in 2008 but raised them during the Great Depression

--During the Great Depression, U.S. real GDP fell by about 27 percent, in comparison to the 3.7 percent decline during the Great Recession.