Posted: September 7th, 2022
An economic recession is typically defined as negative economic growth during two consecutive quarters. In a financial crisis, asset prices see a steep decline in value, businesses and consumers are unable to pay their debts, and financial institutions experience liquidity shortages. Although historically the two do not always coincide, in the United States, both recessions of 2001 and 2008 partially overlapped with a financial crisis. Why do you think that was the case? Do you think this was a coincidence? What type of conclusions can we draw from such events, if any, and why?
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