1980's Recession - Comparing Then To 2010
1980's Recession - Comparing Then To 2010
The year 2010 is on the verge of recovering from the 2008 recession. There is a debate over the impact of 1980 and 2008 recessions that pulled down the US economy. For the consecutive three years from 1980 to 1983, the gross domestic product showed a declining trend. The GDP measured at -0.3% in 1980, which increased to 2.5% in 1982, and again went down to -1.9% in 1983. That was the period when the rate of unemployment was high, which is quite similar to the earlier stages of the recent recession. However, the period between 1983 and 1989 showed a positive trend with the declining rate of unemployment and also interest rates, which were very high previously.
The 2008 recession started during the latter half of the year and its worse impacts existed till late 2009. There was a modest growth that the economy experienced while coming out of the recession. The gross domestic product of the first two quarters of 2010 measured at 3.7% and 2.4% respectively. However, this recovery rate of GDP is less in comparison to the rates of quarter one and quarter two of 1983, which were 5.1% and 9.3%. Therefore, the recover process of 1980 recession was faster than the recent one.
The rate of unemployment in 2010 is steady at 9.7% and the economy experts are indicating that in spite of the end of the recession, the rate of unemployment is increasing. However, the growth of gross domestic product is decent and the rates of interest are low like never before. During the early period of 1980, the rate of interest of mortgage loans was reaching sky high. It became extremely difficult for people to buy homes and there was absolutely no possibility of refinancing the mortgage loans. In comparison to that, the problems in 2010 are quite different. Now the interest rates are all time low but there is a crisis in the real estate market. In fact, the national debt is mounting.
The bad period of economy due to the 1980 recession effect was over by 1983. Since then, the economy experienced steady growth for the consecutive twenty eight quarters. The employment rate increased and mortgage rates dropped. We can hope that from 2010 onwards, the economy will keep growing steadily.
Both the recessions showed the trend of recovery after initial setbacks. However, the set of problems differ from the 1980's recession to the present times.
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