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Panics and Recessions

  • Panic of 1792
  • Panic of 1819
  • Panic of 1837
  • Panic of 1854
  • Panic of 1873
  • Panic of 1884
  • Panic of 1893
  • Panic of 1901
  • Panic of 1907
  • Recession of 1921
  • Great Depression
  • Recession of 1938
  • Recession of 1949
  • Recession of 1953
  • Recession of 1957
  • Recession of 1960
  • Recession of 1970
  • Recession of 1974
  • Recession of 1980
  • Crash of 1987
  • Recession of 1990
  • Recession of 2001
  • Great Recession
  • Flash Crash 2010
  • All banking panics, with the exception of the panic of 1893, began in New York with an unexpected financial shock: the collapse of a brokerage, merchant banking house or houses,and/or the failure of a state or national bank or trust company. The immediate effect was a loss of depositor confidence manifest by bank runs that were usually bank-specific. Panics spread from there to the rest of the country as the interior banks, especially the country banks, reacted by withdrawing their balances and by contracting their loans and deposits due to a sudden change inactual or perceived insolvency.

    In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation. The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research (NBER), a private non-profit research organization that focuses on understanding the U.S. economy.

    The NBER recession is a monthly concept that takes account of a number of monthly indicators—such as employment, personal income, and industrial production—as well as quarterly GDP growth. Therefore, while negative GDP growth and recessions closely track each other, the consideration by the NBER of the monthly indicators, especially employment, means that the identification of a recession with two consecutive quarters of negative GDP growth does not always hold.

    A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.

    Since World War II, nearly all recessions were preceded by oil price shocks. These shocks adversely affect businesses and consumers, causing economic growth to slow. For example, around the time of the Iranian revolution in 1979, oil prices doubled within a year, contributing to the 1980 and 1981–82 national recessions. Similarly, the 1990–91 recession was precipitated, in part, by another doubling of oil prices in the months following the invasion of Kuwait and leading up to the first Gulf War.

    BUSINESS CYCLE
    REFERENCE DATES
    DURATION IN MONTHS
    Peak Trough Contraction Expansion Cycle
    Quarterly dates
    are in parentheses
    Peak
    to
    Trough
    Previous trough
    to
    this peak
    Trough from
    Previous
    Trough
    Peak from
    Previous
    Peak

    June 1857(II)
    October 1860(III)
    April 1865(I)
    June 1869(II)
    October 1873(III)
    March 1882(I)
    March 1887(II)
    July 1890(III)
    January 1893(I)
    December 1895(IV)
    June 1899(III)
    September 1902(IV)
    May 1907(II)
    January 1910(I)
    January 1913(I)
    August 1918(III)
    January 1920(I)
    May 1923(II)
    October 1926(III)
    August 1929(III)
    May 1937(II)
    February 1945(I)
    November 1948(IV)
    July 1953(II)
    August 1957(III)
    April 1960(II)
    December 1969(IV)
    November 1973(IV)
    January 1980(I)
    July 1981(III)
    July 1990(III)
    March 2001(I)
    December 2007 (IV)
    December 1854 (IV)
    December 1858 (IV)
    June 1861 (III)
    December 1867 (I)
    December 1870 (IV)
    March 1879 (I)
    May 1885 (II)
    April 1888 (I)
    May 1891 (II)
    June 1894 (II)
    June 1897 (II)
    December 1900 (IV)
    August 1904 (III)
    June 1908 (II)
    January 1912 (IV)
    December 1914 (IV)
    March 1919 (I)
    July 1921 (III)
    July 1924 (III)
    November 1927 (IV)
    March 1933 (I)
    June 1938 (II)
    October 1945 (IV)
    October 1949 (IV)
    May 1954 (II)
    April 1958 (II)
    February 1961 (I)
    November 1970 (IV)
    March 1975 (I)
    July 1980 (III)
    November 1982 (IV)
    March 1991(I)
    November 2001 (IV)
    June 2009 (II)
    --
    18
    8
    32
    18
    65
    38
    13
    10
    17
    18
    18
    23
    13
    24
    23
    7
    18
    14
    13
    43
    13
    8
    11
    10
    8
    10
    11
    16
    6
    16
    8
    8
    18
    --
    30
    22
    46
    18
    34
    36
    22
    27
    20
    18
    24
    21
    33
    19
    12
    44
    10
    22
    27
    21
    50
    80
    37
    45
    39
    24
    106
    36
    58
    12
    92
    120
    73
    --
    48
    30
    78
    36
    99
    74
    35
    37
    37
    36
    42
    44
    46
    43
    35
    51
    28
    36
    40
    64
    63
    88
    48
    55
    47
    34
    117
    52
    64
    28
    100
    128
    91
    --
    --
    40
    54
    50
    52
    101
    60
    40
    30
    35
    42
    39
    56
    32
    36
    67
    17
    40
    41
    34
    93
    93
    45
    56
    49
    32
    116
    47
    74
    18
    108
    128
    81

    Average, all cycles:
    1854-2009 (33 cycles)
    1854-1919 (16 cycles)
    1919-1945 (6 cycles)
    1945-2009 (11 cycles)
     
    17.5
    21.6
    18.2
    11.1
     
    38.7
    26.6
    35.0
    58.4
     
    56.2
    48.2
    53.2
    69.5
     
    56.4*
      48.9**
    53.0
    68.5
    * 32 cycles
    ** 15 cycles




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    Page last modified: 01-11-2017 19:30:13 ZULU