The Great Recession of 2007-2009

The recession of 2007-2009 was a global phenomenon, although it was the advanced economies such as the United States that were affected to the greatest extent (Dao & Loungani, 2010). In the United States, the official declarer of recessions is the National Bureau of Economic Research (NBER). NBER (2010) defines a recession as “a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesaleretail sales” (p. 1). According to the NBER’s Business Cycle Dating Committee, the most recent recession experienced by the United States began in December 2007 and ended in June 2009 (NBER 2010; Figure 1). This was the longest recession experienced by the United States in the post–World War II period and followed 73 months of economic expansion. Although the NBER uses a variety of variables to identify the start and end dates of a recession, the unemployment rate provides a good indicator of the impact of a recessionary period. The seasonally adjusted unemployment rate was 5.0% at the start of the recession and rose to 9.5% at the end (Figure 1). However, it should be noted that the U.S. unemployment rate peaked at 10.0% in September 2009, 3 months after the recession was declared to be over. Because of its severity and the fact that it was the longest recession since the Great Depression (August 1929 to March 1933), this period has become colloquially known as the Great Recession. It should be noted at this point that the authors who contributed to this special issue use different starting and ending dates in their respective studies. This is perfectly acceptable. The Great Recession is a multifaceted phenomenon that defies simple definition or delineation. As noted below, for example, different cities entered the Great Recession at different times and were differentially affected. The impacts of the Great Recession were not evenly felt across the United States. For example, African Americans suffered more than Whites (Engemann & Wall, 2009), the manufacturing and construction sectors were particularly hard hit (Connaughton, 2010; Goodman & Mance, 2011), and workers with disabilities were more likely to be laid off than workers without disabilities (Kaye, 2010). Different sectors of the economy and different parts of the country also entered and emerged from the Great Recession at different points in time. For example, Cleveland, Ohio entered the Great Recession during the third quarter of 2007, St. Louis, Missouri during the first quarter of 2008, and Dallas, Texas during the first quarter of 2009 (Wilkerson, 2009). The impact on the average American family was devastating— major stock market indices fell nearly 50%, house prices dropped to 27.5% below their peak, the net worth of the typical American family fell by 38.8%, and unemployment rose from 5.0 to 9.5% (Bricker, Kennickell, Moore, & Sabelhaus, 2012). Studies have also suggested that recessions can have significant indirect impacts such as an increase in the number of heart attacks and stress-related health ailments (Burgard, Brand, & House, 2007), reduced academic performance on the part of the children of laid-off parents (Stevens & Schaller 2009), and a general reduction in societal cohesion (Giuliano & Spilimbergo, 2009). It has been almost 4 years since we officially emerged from the Great Recession. Yet such was its severity that its impacts are still being felt. Indeed urban theorist Richard 485633 EDQ27210.1177/0891242413485633Economic Development Quarterly 27(2)Reid et al. research-article2013