The Causes and Cures of the Economic Crisis Dean Baker, Co-Director Center for Economic and Policy Research September 14-15, 2011.

Slides:

Advertisements

Similar presentations

CONGRESSIONAL BUDGET OFFICE Billions of 2005 Dollars Real Gross Domestic Product Gross Domestic Product (GDP): The total market value of goods and services.

Advertisements

Copyright © 2007 Global Insight, Inc. The U.S. Economic Outlook: How Much Fallout from The Housing Meltdown? Nariman Behravesh Chief Economist NAHB April.

The School Finance Outlook for and Beyond Legislative Revenue Office April 2010.

Lesson 12-1 Fiscal Policy.

America’s National Debt and Long-Term Outlook An Overview of the Challenge and the Implications for Young People March 2009.

The Global Economic Crisis: Born in the USA I.The Economic Crisis is a U.S. Debt Crisis II.The Effects of the Debt Crisis III.The New Form of Debt.

Introduction to Macroeconomics

Are you here today? 20 1.yes 2.no. Chapter 4: A First Look at Macroeconomics  Origins and issues of macroeconomics  Economic growth  Unemployment &

The Russian Default of 1998 A case study of a currency crisis Francisco J. Campos, UMKC 10 November 2004.

Understand the role of business in the global economy. 1.

The Obama Presidency I.The Obama Vote II.The Economic Crisis III.Obama’s Domestic Policies.

Saving, Investment, and the Financial System

Essential Standard 1.00 Understand the role of business in the global economy. 1.

Chapter 30 Fiscal Policy, Deficits, and Debt McGraw-Hill/Irwin

Disinflation, Crisis, and Global Imbalances, Firas Mustafa.

Fiscal Policy, Deficits, and Debt Chapter 30 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Business © Thomson South-Western ChapterChapter Economic Activity Measuring Economic Activity Economic Conditions Change.

Glossary of Key Terms business cycle. A cycle of economic activity with periods called contraction, trough, recovery, and peak. collusion. When companies.

Economic Outlook March 2012 Economic Policy Division.

The Current Fiscal Crisis and State Budgets Jeffrey H. Dorfman The University of Georgia October 7, 2008.

Fifth Edition Update 2005–2006. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 2 Figure 1 Personal Savings Rate Chapter 2 Update: Wealth.

Long-Run Implications of Fiscal Policy: Deficits and the Public Debt

Unit 1.04 The Business Cycle Measuring Economic Activity.

ECONOMICS: FISCAL AND MONETARY POLICY. Important Vocabulary  Fiscal Policy  Monetary Policy  Deficit Spending  Stagflation  Multiplier Effect  Easy-Money.

Institution Affiliation: Date:. Introduction Federal reserve and discounting rates Discount rates and bank interest rates Using monetary policy to avoid.

Essential Standard 1.00 Understand the role of business in the global economy. 1.

Understand economic conditions

The Causes and Cures of the Economic Crisis Dean Baker, Co-Director Center for Economic and Policy Research April 13, 2012.

Chapter 1 Why Study Money, Banking, and Financial Markets?

The Economic Outlook: Recession and Opportunities By Dean Baker Co-Director of the Center for Economic and Policy Research (CEPR)

Business Cycle & Government interaction in the economy.

2-1Measuring Economic Activity 2-2Economic Conditions Change 2-3Other Measure of Business Activity.

Policy Matters Ohio Instructions for the Super Committee: a balanced approach to debt reduction That does not increase poverty.

Looking For the Bottom Presented by: Mark M. Zandi, Chief Economist Presented by: Mark M. Zandi, Chief Economist March 31, 2009.

Chapter 6 Macroeconomics the Big Picture 12-1 Copyright  2008 by The McGraw-Hill Companies, Inc. All rights reserved.

Overview   How did the financial crisis affect us?   What are some likely hypotheses regarding the causes of the financial collapse?   What do today's.

The Origins and Severity of the Public Pension Crisis Presentation to EARN Dean Baker Co-Director Center for Economic and Policy Research September 13,

Measuring the Economy Goals 9.01 & Why does the government need to know what the economy is doing?  The government makes decisions that affect.

AMBA MACROECONOMICS LECTURER: JACK WU Financial System.

An Overview of Personal Finance The Importance of Personal Finance –Slow Growth in Personal Income The average annual growth rate in the US is from 2 -

The Economy How can we determine how the economy is doing overall? How does government try to help when things are not going well?

16-1 Copyright © 2012 Pearson Prentice Hall. All rights reserved. C H A P T E R 16 The Dynamics of Inflation and Unemployment Copyright © 2012 Pearson.

5 October 2015 by Sigrid Brevik Wangsness.  The largest economy in the world with a major impact on the global economy  Until October 2008 an economic.

The U.S. Economy, 2007 – Today: Collapse, Stimulus, Austerity, “Recovery” Robert Pollin Department of Economics and Political Economy Research Institute.

CONFIDENTIAL AND PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard & Poor’s.

The Impacts of Government Borrowing 1. Government Borrowing Affects Investment and the Trade Balance.

William F. Fox, Director Center for Business and Economic Research The University of Tennessee, Knoxville November 17, 2015 The 2016 Economy Looks Like.

Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. Slide Short-Term Economic Fluctuations: An Introduction.

Circular Flow of Money. 1. Low and stable inflation in the general level of prices. 2. High and stable employment. 3. Economic growth in the national.

Economic Outlook December 2014 Economic Policy Division.

Macroeconomics, Part II Government Taxation and Spending, or Why Never to Give a Congressman Your Debit Card.

Copyright © 2014 Cengage Learning ECONOMIC POLICY Chapter Sixteen.

Fiscal Policy Changes in federal taxes and purchases.

 Capital Spending: money spent by a business for an item that will be used over a long period.  Capital Projects: spending by businesses for items such.

Financial Collapse Background 1997: Global economic community suffered severe downturn 1998: Strain continues with financial crisis in Russia 2001:

The Housing Bubble Fact Sheet, ISSUE BRIEF July 2005 Dean Baker.

Impact of unemployment. Identify the consequences of unemployment on different stakeholders Using your Handout Households/individual Businesses Economy.

Introduction to Business © Thomson South-Western ChapterChapter Economic Activity Measuring Economic Activity Economic Conditions Change.

Objective 1.02 Understand economic conditions 1 Understand the role of business in the global economy.

Recession 2008 : Comparison with The Great Depression Created By: Abhinav Sehgal Akshay Anand Deepika Misra Karishma Jindal Reuben Khanna.

CHAPTER 2 Economic Activity. MEASURING ECONOMIC ACTIVITY  Economic growth is the steady increase in the production of goods and services in an economic.

  GDP (Gross Domestic Product) – Basic measure of a nation’s economic output and income. Total market value of all goods and services produced in the.

1980s Economy. Supply Side Economics The theory which holds that a greater supply of goods and services is key to economic growth, Reagan sought large.

MONETARY POLICY. What is it?  The use of interest rates and the money supply to control aggregate demand in the economy.

Copyright © Cengage Learning. All rights reserved.1 | 1 Measuring Economic Performance Productivity –The average level of output per worker per hour Economic.

Chapter 25 Government Finance in the Full-Employment Model

AP Economics Mistakes.

Economic Policy Division

Economic Outlook September 2016

Sponge Quiz #1: In Year 1, the cost of a market basket of goods was $720. In Year 2, the cost of the same basket was $780. What was the consumer price.

Presentation transcript:

The Causes and Cures of the Economic Crisis Dean Baker, Co-Director Center for Economic and Policy Research September 14-15, 2011

Key Points on the Economic Crisis 1)The main cause was the collapse of the $8 trillion housing bubble 2)The financial crisis was secondary 3)In the short-term the government must fill demand gap, in the longer term the dollar must fall to reduce the trade deficit.

Real House Prices Rose by More Than 70 Percent Source: Case-Shiller 20-city index.

Lost Annual Demand due to the Recession and the Annual Stimulus,

The Financial System is Not the Problem 1)Homebuyers are able to get mortgages (Mortgage Application Index). 2)Firms can borrow on credit markets at unusually low interest rates (we are not Japan). 3)Even small firms do not consider credit a problem. 4)Investment in equipment and software is close to pre-recession levels.

Interest rates on Aaa and Baa corporate debt,

Investment in Equipment and Software as a Share of GDP,

Budget Deficit as Percentage of GDP,

Potential Savings from Free-market Drugs,

Potential Revenue from a Financial Speculation Tax,

Ways Out of Current Downturn 1)Stimulus – spend money a)youth jobs programs b)aid to state and local governments c)infrastructure projects 2)Federal Reserve Board 3)Work Sharing – fewer hours per job, more jobs 4) Lower valued dollar – move toward balanced trade

Conclusion: We Must Act Quickly to Restore Economy 1)Long-term unemployment is devastating to workers and families 2)Unemployment is an enormous waste of resources 3)We know how to do it 4)It was not the unemployed who messed up on the job