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What Are The Similarities Between Great Depression And The Great Recession Of 2007

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To compare the Great Depression and The Great Recession of 2007 there needs to be background information on both subjects. The economy quickly grew in the 1920 because people spending increased. Be During the Great Depression the economy reached record lows with billions of people in debt. The main cause of the billions of dollars in debt is because of the easy access to credit causing people to buy larger items such as cars and household appliances. The consumer's debt for houses went from 11 billion to 27 billion. However, the recession of 2007 was affected largely by the house bubble collapsing. The financial industries had designed complex ways for people to receive lends. There was a larger risk later that neither the investors of firms …show more content…

The biggest difference with them is that a depression is when the GDP declines 10% and has to last more than 2 years. Although they both took a low point the Great Depression was 43 months from August 1929 to March 1933 while the Recession of 2007 was eight months December 2007 to June 2009. The the drop in industrial production is dramatically different. During the Great Depression industrial production dropped 51.7 percent, while the Recession of 2007 only dropped 14.9 percent. The demonstration of large difference between the two although the Recession of 2007 is often referred to as the worse since the Great Depression. On other major difference was the number of banks during these times. The Great Depression had 9000 bank failures throughout the country. However, in the Recession of 2007 on 443 banks failed which, when comparing the two, shows the great Depression as a drastic time period.(3) The last and important difference would be the policy reaction in both occasions. In the Recession of 2007 the economy used the monetary and fiscal policy to keep the economy falling into another Great Depression. In the Recession was greatly used to fix the economy but was fairly new in during the Great Depression since it was established in

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