Webpages useful for teachers of intermediate macroeconomics:

The Recession of 2001


Powerpoint Version





The NBER determined that the U.S. economy peaked in March 2001, and has been in recession since.

The NBER examines four variables:

In this current recession these four indicators are pointing in different directions. This is not a usual recession--where all of the major indicators show that a business cycle peak has been reached within a very few months of each other. Sales reached a peak in August of 2000. Industrial production has been declining since September 2000. Employment has been declining since March 2001. And incomes continue to rise.

This time, therefore, any dating of the business cycle peak and the recession is exceptionally hazardous. Indeed, the failure of the major indicators to show their standard business cycle-peak pattern raises questions about whether "business cycle theory" provides a good way to understand what is going on.

Previous Handouts

2001-12-03: The Overvalued Euro (Chapter 3: Exchange Rates; Chapter 15: Exchange Rate Regimes)
2001-11-26: Net Exports, the Exchange Rate, and an IS-Led Boom (Chapter 11: Balance of Payments; Chapter 15: Exchange Rate Regimes)
2001-11-19: The European Central Bank and Its Monetary Policy (Chapter 13: Stabilization Policy)
2001-11-12: Central Banks Worldwide Cut Interest Rates Again (Chapter 13: Stabilization Policy)
2001-11-05: Effects of the Collapse in Spending on Durables (Chapter 9: Income-Expenditure and the Multiplier.)
2001-10-28: What Kind of Stimulus (Chapter 13: Stabilization Policy. Chapter 9: Income-Expenditure and the Multiplier.)
2001-10-21: Federal Reserve Reaction to the Terror Attack on the World Trade Center (Chapter 13: Stabilization Policy. Chapter 10: The IS Curve.)
2001-10-14: Why a Stimulus Package Might Be Desireable (Chapter 13: Stabilization Policy. Chapter 10: The IS Curve.)

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