ABSTRACT
The recession of 1981-82 began in July 1981 and ended in November 1982, and it followed a pre-recession period that was extraordinary:
s 4HEnRECESSIONFOLLOWEDTHEEXPANSIONPERIODFROMTHEENDOF the 1980 recession by just twelve months. The twelve-month expansion (July 1980-July 1981) that preceded the 1981-82 recession was by far the shortest of the post-World War II era. s "ECAUSEOF THEBACK TO BACKCLOSENESSOF THEAND THEn
recessions, the 1981-82 recession was affected by economic policy actions taken during the 1980 recession, as well as by actions taken during the recovery following the 1980 recession. s )N-ARCHthree months into the 1980 recession, the Federal Reserve
tightened its monetary restraint on household credit, raised the discount rate at which banks borrow from the Federal Reserve, raised reserve requirements on commercial banks, and raised restraints on the amount of credit extended by large nonmember banks of the Federal Reserve.1 Also in March 1980, President Jimmy Carter proposed reductions in federal loans and loan guarantees. s 4HE&EDERAL2ESERVEPURSUEDANAGGRESSIVEANTI INmATIONPROGRAMBY
restraining economic growth from October 1979 through 1982.
