The Great Recession Of 2008 Was A Worldwide Economic Downturn

Better Essays
The Great Recession of 2008 was a worldwide economic downturn that impacted the global economy. Economists consider the economic decline as one of the most damaging recessions that occurred since the Great Depression of 1930’s. Several documentations and research regarding the recession have been made to make a better understanding of the economic downturn in 2008 as well as the global economy as a whole. The book used as reference in this essay, the Diary Of A Very Bad Year: Confessions of an Anonymous Hedge Fund Manager, captured the events corresponding to the length of the Great Recession through separate interviews of an anonymous hedge fund manager (HFM). The interviews contain information shared by HFM that describes the Great…show more content…
HFM’s experience as a hedge fund manager gives value into this information and the authority to describe what started the crisis. The advantage that follows from the source regarding this idea is that it recorded information that described the creation of the mortgage bubble in the financial market, and the damage dealt to the financial system when the mortgage market crashed from a finance expert. The disadvantage is that the subprime market might not be the only reason of the misallocation of resources, given the fact that HFM’s hedge fund was involved in the subprime market which might have formed a biased opinion on that matter (18-19). The nature of the source does not complicate the idea of the cause of the crisis, although concluding that the subprime market was the main cause could complicate the subject. This clearly shows that the idea of the misallocation of resources within the book had negatively impacted the financial system that built the momentum of the economic decline. Another main idea in the book is the linkages of the financial system to the real economy during the recession. In the duration of the financial crisis, unemployment as well as job loss increased, wage eroded, and companies and businesses closing were in significant numbers (66; 83). In a more specific example, the Reserve Primary
Get Access