Recovery from the 20082009 recession was agonizingly slow Go

Recovery from the 2008-2009 recession was agonizingly slow. Go find factors that might have constrained a faster growth

Solution

Recessions which occur on account financial sector or balance sheet constraint takes time to set on the path of recovery. The financial sector crisis hampers the balance sheet of households for example when the asset price bubble collapsed households lost equities, the stock market declined to cause a huge loss in the government expenditure and savings of household. One major drawback is that policymakers lack in identifying the severity of the recession-type. Another factor was that a small number of stimuli was used that too tax driven instead of infrastructure based or job creation programs along with austerity which made matters worse. If the problem was recognized at the initial stage and appropriate actions were taken the picture would have been different. The central bank reacted after the problem was evident rather than anticipating or forecasting beforehand.