EC250 Lecture Notes - Lecture 1: Bankruptcy Of Lehman Brothers, Freddie Mac, Bear Stearns
Document Summary
Fourth largest investment bank went into liquidation because of bad real estate investments. Was expected that the government + federal reserve would find a buyer to stop firm from bankruptcy. In the past, federal reserve arranged purchase of bear stearns by jp morgan by providing a billion loan. Fannie mae + freddie mac were also rescued. The 2007-2009 recession - how economists date recessions. Recession: real gdp falls for 2 consecutive quarters but it is more complicated in real life. In the us, national bureau of economic research (nber) in cambridge, massacusets provides dates of us recessions. Nber defines recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. Howe institute in toronto set up the business cycle council in 2012 with a goal of dating canadian recessions.
