It’s clear to see that the US economy is not growing at the rate the central bank wants it to. After the recession and the financial crisis, it’s understandable. Fortunately, as per reports and statistics available, the US economy is recovering at a much better rate than any other economy does after a financial crisis.
The reason why the recovery phase is slow isn’t very certain. It may be due to the unaggressive policies, the banking system, or the extraordinary economic headwinds. As per Ben Bernanke, the Federal Reserve Chairman, the reason for the sluggish recovery can always be that the policymakers and the governments of these economies did not formulate aggressive fiscal and monetary policy. An aggressive policy is needed when any economy is recovering from slowdowns and recession. The Federal Reserve, when making policies, was aggressive and this is the main reason why the US economy is recovering well.
The Federal Reserve has announced that it will take the needed actions to increase the level of inflation in the economy to help it recover at a faster rate. In order to get the borrowing costs low, analysts are expecting it to start buying longer-term government debt again. The level of unemployment still has not come down in the US economy and this is mainly because of the fact that the economic recovery is not happening at the expected rate because of the policy. The financial markets are performing well now, but certain other aspects of economic recovery need more attention.
The economic recessions which hit the US in 2007-2009 were due to the inability to manage risks, manage financial institutions and anticipate the flaws in the economic theory and policies. It is important for economists to analyze and have a better understanding of human behavior so that they know the reaction of the masses in certain situations. This puts them in a better position to plan. The US economy is recovering well but the in-depth analysis is needed to avoid the same situation later.
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