Economic Retraction and Stagnation

A recession is a difficult time for an economy of a country, when the trade is on the minimal trade activities and there are fewer opportunities for growth and employment. There is an estimation that there has been so many downturn to present and with each, there has been a greater economic prosperity from the as they make the government able to cater for the prevention of something worse than what has already happened (Friedman, M & Schwartz, 1971). We find that the recessions can be avoided by having in place a well established fiscal policy for which is mainly by having more interconnections of the taxes collected by the government and ways best to make use of it.

The economy of any state this way becomes the main priority and the amount of tax collected is what comes up with the most strategic ways of its use (Brown, 1989). The monetary policies are those which involve the circulation of monies and its making. Having no standard of determining this can be seen in the banks trying to create such venture to determine the flow of money in a given locality. In the recession of 1796-1799 also known as the panic depression which was the very first of its nature, this was caused by lack of a stable financial industry which would have foreseen such an occurrence, it is also attributed to the real estate disestablishments and with which there was less not proper appropriation of value of property leading to the loss of millions of dollars in wrongly priced property (Eichengreen & Flandreau, 1997).

This was so bad that the bank of England almost came to sheer bankruptcy as there was also a lot of stealing from it as the money was being printed the depression of currency from gold a transition to less valuable metals also the fiat currency which was worthless and brought about a bit of havoc.

The great depression of 1929, This was caused poor economies thus it was able to move from country to country, the demand was too high as compared to the supply being too little. Politically it was caused by lack of free trade market. This was caused by the world wars and by the time the second war started by world had not yet recovered from the effects of the previous chaos. It began with the fall of stock market and was all attributed to the low currency. The difference with this was that it was not only experienced in the U.S but also worldwide so all suffered irrespective of their economic status.

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