Robert Samuelson, a columnist for the Washington Post, argued that the Great Moderation actually caused the Great Recession. During the Great Moderation, he wrote, “consumers could assume more...

Robert Samuelson, a columnist for the Washington Post,

argued that the Great Moderation actually caused the

Great Recession. During the Great Moderation, he wrote,

“consumers could assume more debt—and lenders could

lend more freely.” Why might consumers have been willing to assume more debt and banks and other lenders

have been willing to make loans more freely during the

Great Moderation? Why might these actions have made

the severe recession of 2007–2009 more likely?