Great Recession

The Great Recession was a severe global economic downturn beginning in 2007, driven by a financial crisis and marked by falling output, rising unemployment, and widespread financial distress.

Subprime mortgage crisis: A collapse in high-risk U.S. home lending that triggered widespread mortgage defaults and losses on mortgage-linked securities. Defaults on risky mortgages began the chain of losses that destabilized financial institutions.
United States housing bubble: A rapid rise in U.S. home prices during the early 2000s followed by a sharp decline beginning in 2006. The reversal in home prices left borrowers owing more than their properties were worth.
Troubled Asset Relief Program: A U.S. government program established in 2008 to stabilize the financial system through purchases and investments. TARP supplied emergency support to financial institutions and other sectors during the crisis.
Great Depression: A worldwide economic collapse beginning in 1929, marked by prolonged output declines and mass unemployment. Comparisons with the Great Depression highlight both the crisis’s severity and the effect of later policy responses.
Ben Bernanke: An American economist who chaired the Federal Reserve from 2006 to 2014. Bernanke led the central bank through the crisis and later explained its policy response.
Mortgage-backed security: A financial asset created by pooling mortgages and passing their principal and interest payments to investors. Mortgage-backed securities transmitted housing-market losses to banks and investors worldwide.
Subprime lending: Lending to borrowers with weaker credit histories or limited ability to meet standard loan terms. Rapid growth in risky mortgage lending expanded the pool of vulnerable borrowers.
American Recovery and Reinvestment Act of 2009: A U.S. stimulus law enacted in 2009 that funded spending, tax reductions, and transfers to support economic recovery. The act was a major fiscal response to collapsing demand and rising unemployment.
Early 1980s recession: A severe recession in the United States and other economies around 1980–1982, associated with high inflation and tight monetary policy. It offers a contrast between a downturn driven by inflation control and one rooted in financial collapse.
Henry Paulson: An American investment banker and Treasury secretary from 2006 to 2009. Paulson negotiated emergency measures, including the financial rescue program enacted in 2008.

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