The Chapter of Depression and Other Stuff

     Reading this depressing chapter from what im sure is a depressing book, I learned a few eye opening facts about Economic Bungee Jumping. For one, it's pretty tough for economists to predict the buisness cycle due to the fact that there are many levels to the business cycle. "Business cycles are an unavoidable and largely unpredictable feature of market economies." (2 IP) The future is something that no one knows, it's unpredictable and it can certainly throw you some curve balls, and "...these decisions often depend as much on gut feeling as cold calculation." (2 IP)

     Another thing that I learned reading this very depressing article, is the definition of a Bull Market and a Bear Market. FACT: Bear Markets are more viloent than Bull Markets and unemployment rises more quickly than it falls. (3 IP) The true definition of a Bull Market however is, a market in which share prices are rising and encouraging buying. While on the other hand, a Bear Market is, a market in which prices are falling, and encouraging to sell.

     The cause of these economic patterns have truly differed over the years and they haven't differed from bad to better, only bad to pretty much the same. This Depressing Book states that "in nineteenth-century America, it was often a natural disaster, a crop failure, or a bank panic" (3 IP). After this statement, this very depressing chapter listed a bunch of failures and disasters: "2001-Technology investments crashed. 2007-House values plummeted." (3 IP)

     How does one know that a recession has occured? Well most people today just usually watch the news and find out from those people sitting at a desk with a coffee mug that I'm sure is empty. Never the less, there is actually a logical explanation: a press release. In 1920 a group was formed called the NBER which promote better economic analysis. Some people might ask, "How does this turn into a depression?" Well, back in 1930, "a depression was the term used for what we now call a recession." (4 IP) Financial crisis' don't always produce depression, but they often lead to severe recessions with unusually weak recoveries- and that my friend, is what produces depression, which later comes out in people.