Economic Geography Essay Example | Topics and Well Written Essays - 500 words

Economic Geography - Essay Example vious recessions in 1990-1991 and 2001, the 2007 economic recession has run deep into the economy becoming the longest financial crisis since the great depression in the 1930s (Kaiser 3). Many states reacted by formulating large stimulus mechanisms in an effort to stabilize the economy. Other mechanisms were bailout of leading financial institutions, which included loans, guarantees and equity. The National Bureau of Economic Research and economists have indicated that the financial recession was triggered in the year 2006 by the broad economic malaise. The sharp deterioration in house prices reduced purchases of homes subsequently damaging the real estate market. Price deterioration extended to increased mortgage closure that subsequently led to massive losses in billions of dollars by leading banks in the country. The ultimate condition was tightening credit by financial institutions. The Federal Reserve Bank began to cut the discount rate and funds rate to no avail. Major Banks such as Lehman Brothers started filing for bankruptcy. Other banks opted to undertake mergers and acquisition. JPM Chase acquired Bear Stearns as a strategy to survive in the crippling economy. As indicated by Cadieux & Conklin (9), the Federal Reserve cut the two rates below 2% by the fall of October 2008. In the same line central banks of leading world economies like China, Canada and United Kingdom as well as the ECB slashed their rates to rescue the global economy. These efforts had little impact as liquidity problem that proved to have spread widely and damaged operation and of financial institutions. The rate of unemployment increased by 1.2% while an increasing number of distributions of jobless claims in the industry proved the economy was under recession (Cadieux & Conklin 12). The manufacturing and construction industries experienced large labor losses that significantly shattered business cycle. Although the level of unemployment declined as time moved to the end of