Economic History of The United States - The Rise of Globalization and A World Superpower: 1990s-late 2000s

The Rise of Globalization and A World Superpower: 1990s-late 2000s

During the 1990s, the national debt increased by 75%, GDP rose by 69%, and the stock market as measured by the S&P 500 grew more than threefold.

From 1994 to 2000 real output increased, inflation was manageable and unemployment dropped to below 5%, resulting in a soaring stock market known as the Dot-com boom. The second half of the 1990s was characterized by well-publicized Initial Public Offerings of High-tech and "dot-com" companies. By 2000, however, it was evident a bubble in stock valuations had occurred, such that beginning in March 2000, the market would give back some 50% to 75% of the growth of the 1990s. The economy worsened in 2001 with output increasing only 0.3% and unemployment and business failures rising substantially, and triggering a recession that is often blamed on the September 11 attacks.

An additional factor in the fall of the US markets and in investor confidence included numerous corporate scandals.

Through 2001 to 2007, the red-hot housing market across the United States fueled a false sense of security regarding the strength of the U.S. economy.