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California shrugged: fountainhead of the Great Recession

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  • Ashok Bardhan
  • Richard Walker

Abstract

California was the epicentre of the current Great Recession. Due to its economic structure, open economy, political institutions and other factors, it has a starring role in the four-fold US crisis underway--housing, urban, industrial and fiscal. First, California was a disproportionately large player in US mortgage markets and its banks engaged in the worst excesses of the housing bubble. Second, California exhibited disproportionate activity in the housing sector among the 50 states and had the most unaffordable housing, making borrowers susceptible to mortgage overreach. Third, the state is the country's largest subeconomy at the forefront of technological innovation, but it manifests troubling elements of industrial decline. And fourth, its fiscal crisis is among the worst of any state. Copyright 2011, Oxford University Press.

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  • Ashok Bardhan & Richard Walker, 2011. "California shrugged: fountainhead of the Great Recession," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 4(3), pages 303-322.
    • Handle: RePEc:oup:cjrecs:v:4:y:2011:i:3:p:303-322
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    File URL: http://hdl.handle.net/10.1093/cjres/rsr005
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    2. Yuanshuo Xu & Mildred E. Warner, 2015. "Understanding employment growth in the recession: the geographic diversity of state rescaling," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 8(2), pages 359-377.
    3. Dan S. Rickman & Mouhcine Guettabi, 2015. "The Great Recession And Nonmetropolitan America," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 93-112, January.
    4. Neil Reid & Michael C. Carroll & Xinyue Ye, 2013. "The Great Recession of 2007-2009," Economic Development Quarterly, , vol. 27(2), pages 87-89, May.
    5. Virginie Mamadouh & Luiza Bialasiewicz & Gordon F. Mulligan & Neil Reid & Michael S. Moore, 2016. "The Current Health of Metropolitan Labour Markets in the United States," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(2), pages 232-253, April.
    6. Susan Christopherson & Gordon L. Clark & John Whiteman, 2015. "Introduction: the Euro crisis and the future of Europe," Journal of Economic Geography, Oxford University Press, vol. 15(5), pages 843-853.
    7. Mark Davidson & William Kutz, 2015. "Grassroots austerity: municipal bankruptcy from below in Vallejo, California," Environment and Planning A, , vol. 47(7), pages 1440-1459, July.

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