Effectiveness of the Counter-Cyclical Policies
ECO/561
The Great Recession
Declines began in the early 2000’sWorldwide shift in the marketThe largest down turn since the Great DepressionBackdrop of sharp credit boomsSignificant declines in the unemployment rate
The Housing bubble
Vital force to the debt crisisSparked a global recessionFueled a down turn in European Sovereign debt crisisWhose to blame?
Monetary Policy that Affected the Housing Bubble
The Federal Fund RateDid we see this coming?
Changes in Supply/Demand
What caused the spark in demand?Why was supply limited?
Economic and Sociological Forces
Moderate recession declineMonetary policy of 2002
Government Policies
The fall of the housing marketHomeowner equityThe government’s role in the housing marketA economy without government interferenceGovernment policies that reduced home equity
Housing price index
Unemployment rate
Conclusion
The housing bubble aftermath
References
Bernanke, C. B. (2010, January 03). Monetary Policy and the Housing Bubble. Retrieved from Board of Governors of the Federal Reserve System: https://www.federalreserve.gov/newsevents/speech/bernanke20100103a.htmChristiano, L. J. (2017, February 7). The Great Recession: A Macroeconomic Earthquake. Retrieved from Federal Reserve Bank of Minneapolis: https://www.minneapolisfed.org/research/economic-policy-papers/the-great-recession-a-macroeconomic-earthquakeEvaluating the Housing Market Since the Great Recession. (n.d.). Retrieved from Core Logic: https://www.corelogic.com/downloadable-docs/corelogic-peak-totrough-final-030118.pdfHALL, M. (2018, June 13). How does the law of supply and demand affect the housing market? Retrieved from Investopedia: https://www.investopedia.com/ask/answers/040215/how-does-law-supply-and-demand-affect-housing-market.aspKASHKARI, N. (2017, May 17). Monetary Policy and Bubbles. Retrieved from Federal Reserve Bank of Minneapolis: https://www.minneapolisfed.org/news-and-events/messages/monetary-policy-and-bubblesSmith, L. (2018, May 21). What Is a Housing Bubble? Retrieved from SmartAsset: https://smartasset.com/mortgage/what-is-a-housing-bubbleWallison, P. J. (2012, April 26). Free fall: How government policies brought down the housing market. Retrieved from AEI: http://www.aei.org/publication/free-fall-how-government-policies-brought-down-the-housing-market/