What were the main causes of the 2001 recession?

What were the main causes of the 2001 recession, you might ask? First, let’s focus on the here and now. Anyone with access to the media in any form has probably been curious about the latest recession talk. We are definitely falling into one, and it seems serious. Unbridled capitalism and consumer spending finally caught up with us and now we are paying the dues. What goes up must come down, and this is exactly what is happening with the extraordinary economic growth that we have seen in the last two decades. It has been said that we must learn from the past to avoid making the same mistakes again in the future. The previous and most recent recession that comes to mind was the one that occurred in the early stages of this decade. What were the main causes of the 2001 recession?

The most obvious problem was the collapse of the dot-com bubble. Basically, too many companies entered Internet marketing with their eyes and judgment clouded by dollar signs. They saw the Internet as a kind of “money multiplier” machine that you basically invest $ 2.00 in to earn $ 200.00. They got lazier and less creative with their marketing efforts. This whole philosophy turned out to be wrong for the most part, and online consumer spending began to show it. Eventually a large number of these generic companies went bankrupt.

This Dot-com crash caused a crash on the NASDAQ. The Dow Jones remained relatively unscathed by the collapse of the NASDAQ until September 11, 2001, when the terrorist attacks occurred. In the months that followed, the market rallied and repeatedly crashed. It finally crashed hard in the final quarters of 2002, causing a recession.

Some economists dispute whether or not to label this period of economic downturn a recession due to the fact that it did not last two full consecutive cycles. Nonetheless, it still had a very felt impact on the American people. In discussing the main causes of the 2001 recession, we are definitely forced to consider the relevance to our current dire economic situation.

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