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2007
-Many countries experienced a rapid growth in house prices. House price rose faster than inflation and faster than incomes.
-The resulting loss of wealth led to sharp cutbacks in consumer spending -
2008
-The Fed reduces short-term interest rates for the fifth time in four months, to 3 percent.
-Bush signs tax stimulus
-In december Fed lowered its benchmark interest rate to zero.
- JPMorgan Chase agrees to buy Bear Stearns at deep discount
-Lehman Brothers files for bankruptcy
-All major economies experienced a very sharp drop in real GDP. -
2009
- President Obama signs into law a $787 billion stimulus package that includes tax cuts and money for infrastructure, schools, health care, and green energy. -General Motors files for bankruptcy and says it will close 14 US plants. -In June the recession officially ends after 18 months, making it the longest downturn in postwar history.