As defined by the National Bureau of Economic Research (NBER), a recession is a decline in economic activity across the country which lasts for more than 2 quarters or 6 months. This could be noticed by when a downfall is noticed in employment, GDP, real income, wholesale-retail sales and industrial production. And, the United States is one country which has witnessed about as many as 47 recessions over the years. Here’s what the recessions had brought to the country.
- Panic of 1785
This recession lasted for as long as four years and put an end to the business boom that was the result of the American Revolution. The decline in the economy can be traced back to the buildup of debts, competition in the manufacturing sector, lack of sound currency along with overexpansion. The situation was intensified due to the absence of interstate trade. The panic among propertied and business groups led to the demand for a more strong federal government.
- Panic of 1796
Just like the previous one, this recession also lasted for four years. The recession of this year was categorized as a result of deflation from the Bank of England which disrupted real estate and commercial markets in the US and the Caribbean causing a terrible financial panic, just as land speculation was bursting there. Economic activity remained stagnant for three years in North America.
- Panic of 1815
Among all the recessions the United States went through, the Panic of 1815-1821 was the longest which lasted for 6 years. After the war ended in 1815, the US entered into a period of financial panic as the value of the banknotes diminished because of inflation. Several years of mild depression followed after the panic of 1815 and then it led to a major financial crisis in 1819 which marked bank failures, widespread foreclosures, a collapse in real estate prices, unemployment and a slump in agriculture.
- Panic of 1825
A stock crash following by investments in Latin America resulted in a decline in business activity in England and the US. It coincided with another major panic, the date of which is easier to determine than the general cycle changes that are associated with other recessions. This recession did not last for a very long time but its effect was quite intense on the economy of the United States.