My group group have to submit Project on the Recession ,in the following topics my topic is 5)Response to the Great Recession , i need to write 5 articles about this topic with references. 1) Abstract

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CAUSES OF THE GREAT RECESSION OF 2007-9: THE FINANCIAL CRISIS IS THE SYMPTOM NOT THE DISEASE!

The article is written by Ravi Jagannathan, Ernst Schaumburg and Mudit Kapoor and was published in national bureau of economic research. The article describes about one of the causality for the great recession. The author has focused mainly on inability of the big financial and legal institution of developed countries to invest in the local market due to availability of the labor from developing countries. The most important factor about this article is that the author has exemplified the situation by taking US has developed country and China has a developing country and how the united states of America has been able to invest in China to use the cheaper labor and cheaper loan which in turn increased the debt for big institutions of the USA. Along with that the author has also included impacts of US households policies, house pricing and account balance on the great recession and has described a difference between housing bubble and stock market bubble.

THE STOCK MARKET CRASH REALLY DID CAUSE THE GREAT RECESSION

The article is written by Roger Farmer, UCLA and was published in national bureau of economic research. The article described one of the causes of the great recession. This article mainly focuses on the connection between stock market and unemployment rates in general with an example of how it has affected the great recession of 2008. The most important part of this article is that the author has used a real data from S&P 500 from Shiller (2014) and unemployment rates from the bureau of labor statistics. The author has presented three stimulations where in the first stimulants, the author has described co integrations between stock market and unemployment rate, in second stimulant, he has described structural breaks between the co-integration and in the third stimulant he has described a bivariate model used during the structural breaks to support the argument. The article is slightly biased on using VECM (Vector error correction model) because the model works during most of the time but during structural breaks it does not work.

WHAT CAUSED THE RECESSION OF 2008? HINTS FROM LABOR PRODUCTIVITY

This article is written by Casey Mulligan, university of Illinois Chicago and was published in national bureau of economic research. The article described one of the causes of the great recession. This article describes one of the reasons behind the great recession. The article mainly focuses on how change in usage of labor can contribute in the recession. The most important part of this article is that it has discussed all previous recession and other causal factors of the great recession and the article has explained that how the great recession of 2008 was different from all the previous recession by comparing it in the table form which includes recession from 1930 to 2008. The change in labor was described in three sub sections those are productivity shocks; wealth and intertemporal substitution; and labor distortions and labor preferences. According to the author, the recession of 1930 and previous recession remedies did not work for the recession of 2001 and the great recession of 2008 due to having different causality.

INTERPRETING THE CAUSES OF THE GREAT RECESSION OF 2008

This article is written by Joseph E. Stiglitz and was published on Columbia university website. The article describes about all the possible cause that might have caused the great recession of 2008. As per the author the causes includes, failure in the financial systems, flawed incentives and models, low interest rates in terms of national policy and international market and lack of knowledge of investors in assessing risk. The most important part of this article is that it included all possible causes in one article instead of focusing on any particular reason, which gives a broader perspective to understand the reasons of recession. The article describes the failure in understanding the market and ignoring the downsides of market by different federal and other regulators. Similarly the author has mentioned that housing boom was also a bubble where the house rates were higher than the original value and the debt ratio was increasing. Per author, increased interest rate, effect of high oil price could work as a prick and can burst the economic bubbles which lead the great recession of 2008.

Oil prices and the economic recession of 2007-08

The article is written by James Hamilton (Professor of economics University of California San Diego) and was published on research based policy analysis and commentary from leading economists. The professor had described one of the causes of great recession of 2008. As per the professor, the change in oil price was one of the causes of the recession of 2008. The most important part of the article is that the author has studied consumer spending, global GDP, factors that affected GDP and compared the predicted oil price versus the actual oil price. Per author, the housing boom was considered as one of the reason for recession but it did not significantly affect the GDP. Per author apart from housing boom effect, the oil shock of 2007 had also impacted the global economy. As per the author, the oil prices were doubled from the period of June 2007 to June 2008 which had impacted the global GDP drastically.