This assignment´s main objective is to clarify the Great Recession, it´s causes and consequences. Then, it will be highlighted the possible relation between the actual crisis and one(s) of the “killer apps” listed by Neil Fergunson, a British Historian known by his provocative and controversial views.
Many economics acknowledge the Great Recession to be the most devastating global economic crisis since the Great Depression in the 30´s. This crisis is based on some factors, worth to be emphasized, such as easy credit conditions that encouraged high risk lending and borrowing practices; international trade imbalances; the housing bubbles; the fiscal policy choices by the governments, related to their revenues and expenses or the position taken by some federal reserve banks, especially on the bailing out process of financial institutions.
The first cause we can appoint it’s related to the risk or actual bankruptcy of the major financial institutions globally, starting with the collapse of the “Lehman Brothers” (September
2008), a global financial services firm. Some of these kinds of institutions highly invested in risky securities, which depreciate almost their entire value, when United States and European housing bubbles began to deflate during the 2007-2009 period. Consequently, as share and housing prices decreased, a major panic was installed on the inter-bank loan market, resulting on the failure of many others large and well established investment and commercial banks in the U.S. and Europe, such as the “American International Group”, which was later rescue by the U.S. Federal Reserve, or the “Fannie Mae and Freddie Mac”, a government-sponsored enterprise. Furthermore, the global recession had repercussions on the international trade, which presented a decreasing tendency, along with the rising unemployment and inflation.
Summarizing, this