Effectiveness of the Counter-Cyclical Policies – PowerPoint Presentation

Effectiveness of the Counter-Cyclical Policies


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


The housing bubble aftermath


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/