Are we in recession and what effect will it have on the middle class Research Proposal

Are we in recession and what effect will it have on the middle class - Research Proposal Example This shows how many factors can work together to create a holistic idea about the current state of the economy. Many look to the mortgage industry and its impact on financial sectors for a more specific answer. The mortgage industry is currently affecting the consumer and banks in complicated ways. There is a lot of media coverage about it and there is at times the atmosphere of panic, with economists over-valuing the impact of the current mortgage industry and also predicting things that are in no way true. However, a recession is denoted by six months’ continuous drop in GDP, whereas the GDP has actually grown in recent quarters. Therefore, the impact on the consumer may be over-valued, but in any case, the recession has left lasting effects. â€Å"Home prices are now deflating at a 32% annual rate versus 8% six months ago. And the deflation is sure to intensify as the 4.6 million new and existing homes still sitting on the market find a clearing price† (Up, 2010). Th e mortgage industry currently also affects other zones of enterprise other than the middle class consumer, such as financial intermediaries including commercial banks.