In early 2008, the gross domestic product, which acts as a measure of all goods and services being produced by the United States and is ultimately a scale of U.S. productivity, began to drop severely. Around the same time, the unemployment rate rose to over 10 percent. The United States was experiencing an economic decline that affected almost all sectors of society- students, parents, homeowners and bankers alike. Through this, Brandeis' International Business School professors and students have watched as the economic crisis has affected the world at large, and Brandeis as a microcosm of society. The Justice spoke with IBS professors and students majoring in business about what they thought of the economic recession and what they think is likely to happen in the future. Evaluating what happened

Over the last year, while the economy of the United States was experiencing a financial crisis, the economies of underdeveloped countries were affected less.

Prof. Catherine Mann (IBS), says this is because what took place was a crisis of industrialized countries.

"When the recession first began one-and-a-half years ago, people were saying that the crisis was going to be even worse for developing countries than for industrial countries, and in fact that was not true," says Mann. "[Developing countries' growth rates are] doing quite well, but it stems from a situation where they were already doing not so bad. That means they've had far less of an adjustment to make, and they're growing from a base that was okay," says Mann.

Mann says that the United States' unemployment rate was hit harder than that of industrialized European countries.

"Europe didn't have as much of a decline in employment because they have a much stronger social safety net. So they didn't have much unemployment. As a result, they also didn't have as big of a decrease in GDP, because if people are employed, then they go out and spend," says Mann.

What this means for students

The high employment rate brought on by the economic crisis especially affected college students and recent college graduates.

Business undergraduate departmental representative, Sara Enan '11 talks about effects of the recession and how it has specifically hurt juniors and seniors.

Enan says that a cycle "begins by making it difficult for graduate students and seniors to find jobs, so they start applying for internships instead." This, then, affects juniors who are trying to find internships because firms would rather give an internship opportunity to graduates and seniors.

Since it is difficult for seniors to find jobs, more and more are applying to graduate schools, and with the high influx of applications, graduate schools have become a lot more competitive than usual, thus causing more stress and hardship for current seniors.

Joshua Bellet '10, another Business UDR, adds that because it has become more painstaking for graduates to find jobs in a recession, "many graduates are forced to take a job in an area in which they would not have worked in better economic times."

Graduates take these jobs knowing that they might need to work at them for at least a year or two. Yet it is not all "doom and gloom" for college graduates. Bellet added, "It is possible that companies will let go of higher-paid, more experienced employees and will thus hire new college graduates."

Associate Prof. George Hall (IBS) explains that unemployment problems are a function of the times in which this recession hit. The difference between this recession and the one that occurred in 1982 is that "in '82 a worker got laid off, and six months later he got rehired in same firm."

This time, someone who is left unemployed will have to begin working in a different industry because many jobs are being substituted by technology. This obviously creates a range of problems in society because people will have to learn new skills in order to find work.

Enan states, "It is clear that economics and business majors are facing the most competitive industry, whether it's banking, consulting or government jobs. Adding one of the analytic majors, such as Mathematics, Physics or Computer Science ,could really put someone in a better position in terms of finding jobs."

Bellet added that certain professions-particularly those that are not core to business operations- such as positions in communications, marketing and advertising, are often the first to get cut.

Looking to the future

In October 2009, the IBS hosted a discussion panel to mull over the prospect of when the recession will be over. Economists seemed to be in accord regarding what lies ahead for the global economy: that the worst was over.

According to the IBS Web site,?Dean of the IBS Bruce Magid asked the panelists if they thought the economy could emerge potentially better or worse as a result of the economic crisis. The panelists, Sara Johnson, managing director of Global Macroeconomics for IHS?Global Insight; and Geoffrey Somes, the vice president and senior economist at State Street Global Advisors both agreed that things had stabilized.

Now, almost five months after the discussion panel, Mann believes that the economy is still moving in the right direction.

"People are looking at the global economy with a lot more optimism than they were six months ago," says Mann.

Hall stated that the U.S.'s GDP has stopped declining; However, he says this decline is not going fast enough to create the number of jobs that have been lost since December 2007. The current unemployment rate in the nation fluctuates around 10 percent. Once this rate reaches 5 percent, the recession is over.

Mann says the real question is how long it will take to be back at the point where the world was before the recession -in other words, at a low 4- or 5-percent unemployment rate. She says an exact date cannot be placed because there are too many factors to consider. Mostly, she says, it all depends on how fast people's confidence levels rise.

Mann and Hall have differing views on what role the increase of the money supply will play during economic recovery. Yet they agree that the final outcome will not result in inflation for the U.S. economy.

Hall says that the Federal Reserve Board should increase moneylending to ensure that there is no liquidity crisis. He says that many people are concerned that this would cause inflation, but that he believes the Fed would be able to make that money back by selling stocks and bonds.

In contrast, Mann thinks that the extra money being supplied is kept by the Fed. By increasing the money supply, Mann believes the Federal Reserve "is assuming a more rapid growth" than we will actually see. However, since the money is kept in the reserve, the chances for a substantial inflation after the recession are diminished.