Politics
Generally an administration gets credit or blame for the state of economy during its time. This has caused disagreements about when a recession actually started. In an economic cycle, a downturn can be considered a consequence of an expansion reaching an unsustainable state, and is corrected by a brief decline. Thus it is not easy to isolate the causes of specific phases of the cycle.
The 1981 recession is thought to have been caused by the tight-money policy adopted by Paul Volcker, chairman of the Federal Reserve Board, before Ronald Reagan took office. Reagan supported that policy. Economist Walter Heller, chairman of the Council of Economic Advisers in the 1960s, said that "I call it a Reagan-Volcker-Carter recession. The resulting taming of inflation did, however, set the stage for a robust growth period during Reagan's administration.
Economists usually teach that to some degree recession is unavoidable, and its causes are not well understood. Consequently, modern government administrations attempt to take steps, also not agreed upon, to soften a recession.
Read more about this topic: Contraction (economics)
Famous quotes containing the word politics:
“The politics of the family are the politics of a nation. Just as the authoritarian family is the authoritarian state in microcosm, the democratic family is the best training ground for life in a democracy.”
—Letty Cottin Pogrebin (20th century)
“All you can be sure about in a political-minded writer is that if his work should last you will have to skip the politics when you read it. Many of the so-called politically enlisted writers change their politics frequently.... Perhaps it can be respected as a form of the pursuit of happiness.”
—Ernest Hemingway (1899–1961)