ABSTRACT

By the end of 2007, it was widely apparent that things were developing badly for the U.S. economy. The housing bubble was deflating, the troubles of financial firms were mounting, and credit markets had begun to “freeze up.” A year later, the National Bureau of Economic Research, the organization that officially declares the existence of recessions, announced that the recession had begun in December 2007. After having ignored problems as they built up over the preceding years, the federal authorities finally took action.