12 Examples of Economic Cycles in History
Stagflation in the 1970s in the USA
Stagflation in the 1970s was a period of economic stagnation and rising prices that affected the economy of the United States of America.
During this period, the US economy suffered from high unemployment, low economic growth and rising inflation.
This period is often attributed to the oil crisis of the 1970s, which caused oil prices to rise sharply and the US dollar to lose value.
Other contributing factors were slow economic growth due to government regulations, rising labour costs and declining productivity.
During this period, the Federal Reserve also pursued a contractionary monetary policy, which further contributed to the economic deterioration.
The Great Depression of the 1930s in the USA
This was a severe economic recession that lasted for 10 years (1929 - 1939) and was characterised by high unemployment, low industrial production and deflation.
It was caused by a combination of multiple factors:
- The Smoot-Hawley Tariff Act
- Increased taxation
- a contractionary monetary policy by the Federal Reserve
- Weak banking regulations
- The stock market crash of 1929
During this period, many businesses closed, wages fell and unemployment rose.
The Federal Reserve pursued an expansionary monetary policy to try to combat the economic recession, but it was not until the New Deal policies of the 1930s that the economy began to recover.
The Post-War 1950s - 1960s in the USA
This was a period of steady economic growth. This period was characterised by low unemployment, low inflation and high economic growth.
The post-war boom was largely driven by the expansion of the manufacturing sector, fuelled by accelerated growth in consumer spending and investment, and the incorporation of new technologies.
The US government also pursued expansionary fiscal policies, such as tax cuts, to help boost economic growth.
In addition, the Cold War led to increased government spending and the development of new industries, such as aerospace and computers.
Recession in the early 1990s in Canada
The recession began in 1990 and lasted until 1993, leading to a significant decline in GDP and a decrease in consumer spending.
The Canadian government implemented a series of fiscal and monetary policies to stimulate the economy and eventually the recession ended and the economy began to grow again.
This recession stemmed from an accumulation of factors, including the fragility of the global economy, sharply higher interest rates and budget deficits.
This period of economic contraction was characterised by a slow pace of economic growth, high unemployment and rising inflation.
2008 Financial Crisis in Canada
This crisis had a significant impact on the Canadian economy, which went through a deep recession, and the country's real Gross Domestic Product (GDP) contracted by 3.4% during the crisis.
Canada's unemployment rate rose to 8.3 per cent, its highest level since 1997.
Between October 2008 and April 2009, more than 100,000 jobs were cut.
The crisis also caused a sharp decline in oil prices and other Canadian commodity exports.
Despite the impact of the crisis, Canada was one of the strongest economies compared to other nations. As a result, the World Economic Forum has ranked Canada first out of more than 140 economies in terms of economic resilience.
Spanish recession between 2007 and 2009
Between 2007 and 2009 Spain suffered a severe recession triggered by the global financial crisis. Real Gross Domestic Product (GDP) contracted by 3.7 per cent, leading to a sharp rise in unemployment to 19.4 per cent, the highest level since 1996.
This was compounded by a sharp fall in oil prices and other Spanish commodity exports, which further exacerbated the effects of the financial crisis on the Spanish economy.
Recession in Germany: 2006-2009
Between 2006 and 2009, Germany suffered a severe recession as a result of the global financial crisis. Germany's real Gross Domestic Product (GDP) contracted by 4.2 per cent, causing unemployment to rise sharply to 8.1 per cent, the highest level since reunification.
This was compounded by a drastic fall in the prices of oil and other commodities exported by Germany, which further aggravated the effects of the financial crisis on the German economy.
The German economy subsequently recovered, but the crisis left lasting effects on the country's labour market.
Germany: 2010
In this year the German economy started to recover from the severe recession of 2006-2009. GDP growth was positive, up 3.6 per cent, and unemployment fell back to 7.1 per cent.
This was driven by strong exports, consumer spending and investment.
Consumer and business confidence in the country also improved, a sign that the economy was firmly on the road to recovery.
Chile: 1997 - 1999
Between 1997 and 1999 there was a severe recession in Chile, triggered by the Asian financial crisis. During this period, GDP contracted by 4.8%, causing unemployment to rise sharply to 11.3%, the highest level since the early 1980s.
This was compounded by a sharp fall in the prices of copper and other export commodities.
Italy: The 1990s
In the early 1990s, the Italian economy was characterised by slow growth, high inflation and persistent budget deficits.
These economic challenges were due in part to a large public debt, an ageing population and rigid labour laws that made it difficult for companies to hire and fire workers.
For its part, the Italian government sought to address these challenges through a series of austerity measures, including reductions in public spending, tax increases and structural changes aimed at improving the competitiveness of the Italian economy.
Despite all these measures, none of this was sufficient to stimulate growth, and the Italian economy remained stuck in a period of slow growth and high inflation.
It was not until the late 1990s, thanks in part to the country's accession to the European Union and the introduction of the euro in 1999.
The arrival of the euro helped to stabilise the Italian economy and lower inflation, making it easier to borrow and finance new technologies.
Japan: The Lost Decade
The Lost Decade is a period of economic paralysis in Japan that lasted from 1991 to 2001.
It began with the collapse of the Japanese asset price bubble in the early 1990s, which sent stock prices and real estate values plummeting.
This led to a severe recession, with GDP declining by almost 1% per year. During this period, the Japanese government implemented a series of policies aimed at stimulating the economy, but they were unsuccessful and the country experienced low economic growth.
Japan: 2013
In 2013, the Japanese economy was recovering from a period of economic stagnation. The government of Prime Minister Shinzo Abe launched a series of reforms and stimulus measures, known as "Abenomics", with the aim of boosting the economy. These included monetary easing, fiscal stimulus and structural reforms.
As a result, the Japanese stock market, as expressed by the Nikkei 225 index, rose by more than 50% in 2013, thanks to increased investor confidence and a cheaper yen.
This caused exports to also increase, benefiting from the weaker currency, and the economy grew by 1.5%, which meant that for the first time in more than a decade, the country was able to record several consecutive quarters of economic growth.