Cracks in the Foundations of Growth: What Will the Housing Debacle Mean for the U.S. Economy?
AbstractWith economic growth having cooled to 0.7 percent in the first quarter of 2007, the economy can ill afford a slump in consumption by the American household. But it now appears that the household sector could finally give in to the pressures of rising gasoline prices, a weakening home market, and a large debt burden. The signals are still mixed; for example, while April’s retail sales numbers caused concern, May’s were much improved, and so was the ISM manufacturing index for June. Consumption growth indicates a slowdown. This Public Policy Brief examines the American household and its economic fortunes, concentrating on how falling home prices might hamper economic growth, generate social dislocations, and possibly lead to a full-blown financial crisis.
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Bibliographic InfoPaper provided by Levy Economics Institute in its series Economics Public Policy Brief Archive with number ppb_90.
Date of creation: Jul 2007
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Web page: http://www.levyinstitute.org
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-08 (All new papers)
- NEP-PKE-2007-08-08 (Post Keynesian Economics)
- NEP-URE-2007-08-08 (Urban & Real Estate Economics)
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