How did the world economy recover after the 2008 crash?

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How did the world economy recover after the 2008 crash?

In: Economics

4 Answers

Anonymous 0 Comments

Because for most people and businesses, it wasn’t that bad. Sure, a lot of people were affected and it caused a good deal of disruption, but most people just kept paying their mortgages and working their jobs, and most companies stayed in business. That sort of thing forms the backbone of a stable economy making it able to withstand occasionally storms.

Anonymous 0 Comments

Prices for things like houses got so cheap that people started to buy them again as people moved into new houses they also needed new furniture, carpets and electrical goods to go in the houses. On top of this governments cut interest rates to near zero levels making it cheap to borrow money to buy stuff.

Anonymous 0 Comments

Most of the recession was caused by fear. This was why banking stocks became borderline worthless and a lot of jobs were eliminated.

The U.S. government bailed out the banks to a tune of trillions of dollars.

People–especially rich people–began investing again. However a lot of jobs never came back. The wage gap is very wide.

Anonymous 0 Comments

Global debt levels were reduced to manageable levels through some combination of the following: austerity, debt restructuring, wealth redistribution and printing money (government stimulus). Once that happened, the short and long term debt cycles could begin again – lenders started lending money again, and people spent that money, driving up other people’s incomes, making them more creditworthy, then they borrowed money and spent it, driving up other people’s incomes, etc.