Question

how to measure of Economic Devastation? What factors are Causes of the Great Recession?

Answer 1

Economic devastation can be measured by looking at key macroeconomic variables such as output and unemployment. The change in output can be measured by looking at GDP growth rate while for the employment loss one can look at the statistics released by the labor bureau. One can also look at the fall in the per capita income after the economic shock.In terms of macroeconomics, change in investment can serve as a measure of investor confidence in the economy. One may also look at how inequality has gone worse to see the segments of society that are adversely affected by it.

There are many direct and indirect causes of Great Recession. The US subprime crisis is said to have triggered the Great Recession. Some like to pin point the excessive savings in the economy that were looking for better returns. These savings got invested in subprime mortgage securities. Once the markets tanked and the mortgage bubble got burst, there was essentiallly a credit crunch in the economy. This credit crunch only worsened trade and spending in the economy. Further it led to the Great Recession.