The Causes Of The July 1990-March 1991 Recession

July 1990- March 1991 Recession

I. Introduction

The July 1990- march 1991 recession lasted eight months and was caused by many different adverse financial problems on the environment in the early 90’s. Most post was recessions are short as this one was. They tended to last only up to eleven months at a time. On October of 1987 Black Monday occurred which caused the stock market to crash. The Persian war joined with the rising infiltration rates created this recession. When the recession began the Fed began to try to reduce infiltration, which then limited economic expansion.(Kevin Mulligan Recessions) Extreme changes in the GDP growth began to emerge at the beginning of 1990’s, however the overall growth seemed to remain positive. As a result of this recession a loss of consumer and business confidence was lost due to rising of oil prices along with an already weak economy.

II. Causes of Recession

World and US new called the recession of 1990-1991 “unlike any other that the country has ever experienced in the post World War II era.” The Gulf War and the Soviet Union had an extremely powerful impact on the recession. The Soviet Union had begun to fall and the Gulf War had just begun. On top of that an oil spill occurred which meant oil prices were reaching a peak. July 1990 marked the largest peacetime expansion that US history has even seen. (Economic Review Federal Reserve Bank of San Francisco) The Gulf War began in 1990 when Saddum Hussein and his Iraq troop invaded Kuwait. NATO had to take action and began “Operation Desert Storm” This battle only lasted 100 hours. The following year, 1991 the USSR began to fall. First the Berlin Wall fell followed by the loss of the Soviet Afghan War, which resulted in the USSR splitting in...

... middle of paper ...

...ned due to the cause of economic problems with Japan and Europe. (A Review of Past Recessions)

VI. Conclusion

Throughout all of my research over the recession of July 1990-March 1991 I have concluded that it was not one of the largest recessions the United States has ever seen, but it was also not the smallest. This recession was only eight months long and did some damage, but not a lot. The Gulf War had the biggest impact on this recession along with the oil spill causing a rise of oil prices. The economy hit a low point and was not able to come out of it until the following year after the recession had already technically ended. Unemployment rates were at a low point towards the ending of the recession and because companies were hesitant about hiring new employees’ unemployment did not start getting better until the following year after the recession ended.