<p>Big recessions produce mass unemployment and for long periods. People can get demotivated, and lose skills and training. As the economy evolves, new skills are needed and unemployed people might lose that. That is a long term damage. Think of all the youngsters in Spain, coming out of the university, ended up working in bars and other low skill jobs. That's not only demotivating but also bad for their human capital.</p>

<p>That's one example I can think of.</p>

CC BY-SA 4.0
2018-11-01T12:40:50.637Z
This is a thoughtful answer (+1), but I will point out that the main problem in Spain is its excessive and anachronistic regulations. Spain retains much of its XIX century character of "rents economy", and its policies lean toward other goals instead of addressing current challenges. The Great Recession could have accelerated a more effective cleanup of the economy & markets had central banks kept their hands off.
Iñaki Viggers
CC BY-SA 4.0
2018-10-31T20:52:12.433Z
2018-10-31T20:52:12.433Z
chatGPT
<p>can you tell me what could be key economic mechanisms that explain long-term damage of the Great Recession?</p>

CC BY-SA 4.0
2018-11-09T00:42:16.147Z
"Economic mechanisms" is already too broad, and it'd be better to have a more concrete measure of what you want us to be discussing beyond "long-term damage". What types of long term damage are you interested in? In the housing market? Financial sector? General employment? Otherwise this just contributes to the question's broadness.
Kitsune Cavalry
<macroeconomics>
What are key economic mechanisms explaining long term damage during Great Recession
Jimbo3
# What are key economic mechanisms explaining long term damage during Great Recession

(Asked by: username_0 on 2018-10-31)

can you tell me what could be key economic mechanisms that explain long-term damage of the Great Recession?

**Tags:** macroeconomics
> **Comments:**
> **username_1**: "Economic mechanisms" is already too broad, and it'd be better to have a more concrete measure of what you want us to be discussing beyond "long-term damage". What types of long term damage are you interested in? In the housing market? Financial sector? General employment? Otherwise this just contributes to the question's broadness.  

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## 1 answers

### Answer by username_2 on 2018-10-31. Score: 2 | Accepted answer

Big recessions produce mass unemployment and for long periods. People can get demotivated, and lose skills and training. As the economy evolves, new skills are needed and unemployed people might lose that. That is a long term damage. Think of all the youngsters in Spain, coming out of the university, ended up working in bars and other low skill jobs. That's not only demotivating but also bad for their human capital.

That's one example I can think of.

> **Comments:**
> **username_3**: This is a thoughtful answer (+1), but I will point out that the main problem in Spain is its excessive and anachronistic regulations. Spain retains much of its XIX century character of "rents economy", and its policies lean toward other goals instead of addressing current challenges. The Great Recession could have accelerated a more effective cleanup of the economy & markets had central banks kept their hands off.  

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