Business Cycle Analysis:

The recession of 1981-1982 was severe but relatively short. It was caused by the Federal Reserve sharply raising interest rates to combat 13.5 percent inflation rate.The inflation had started with the Vietnam War and it seemed to ratchet upwards and a wage and inflation push and shove.

The newly elected president Ronald Reagan went along with the Fed (his college degree was in economics) and he lost lots of support from the public.

When wage rates stopped raising, the Fed dropped interest rates and Reagan cut taxes and the economy came rushing back along with Reagan's popularity.Hence this recession was labeled a V shaped.

The last recession, 2008 to 2009 was labeled a U shaped. A long slog.Clinton deregulated banks and when people are allowed to gamble with other people's money, bad things happen. The housing market absolutely formed a bubble and the bubble burst.Lots of people lost lots of money and a lot of people associated with the construction lost their means of income.Exacerbating the conditions was the fact that those still with jobs raised their saving rate further dropping aggregate demand.

Question, what will be the shape of our future recovery? Try to be detail as much as you can.