Is this global economic crisis a balance sheet recession?

Most people are quite concerned about the economy these days because Europe and America seem to be failing. It is very common human behavior to have the perception that “back in the days” everything was better. An economic crisis is not a new phenomenon, although they started to follow each other up in shorter intervals than they used to. The most famous and disastrous crisis in history was of course the great depression in which the American gross domestic product (what a country produces) fell with 46%. Other recessions may help us to understand the present economic situation. Most economics compare the present economic crisis to the balance sheet recession, which Japan was troubled with a decade ago.

The average recession is different than what Europe and America are facing, but show remarkable resembles to the crisis Japan faced 15 years ago. Both recessions started with a Read the rest of this entry »