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Beyond the Usual Economics

Martha Starr ()

Chapter Chapter 1 in Consequences of Economic Downturn, 2011, pp 1-21 from Palgrave Macmillan

Abstract: Abstract The economic downturn of 2007–09 inflicted considerable economic hardship on the U.S. population.1 Following years of extraordinary increases in home prices in many metropolitan areas, housing prices started falling in 2006, and home construction ground to a halt. As mortgage delinquencies and defaults rose, the balance sheets of financial institutions deteriorated, with full-scale financial crisis erupting in fall 2008. This confluence of factors propelled the U.S. economy into the longest downturn since the Great Depression, with unemployment reaching double digits for the first time in 25 years (see Figure 1.1). Almost all socioeconomic indicators show evidence of painful deterioration. The ranks of the unemployed swelled by almost 8 million between December 2007 and October 2009, with an additional 4.6 million people shifting involuntarily into part-time jobs. Nationally, about 1 in every 135 homes was in foreclosure in the third quarter of 2009, with hard-hit states such as Arizona, California, Florida, and Nevada registering rates on the order of 1 per 52–4 homes. An additional 2.6 million persons fell below the poverty line between 2007 and 2008, while the number covered by private health insurance fell by 1 million.2

Keywords: Financial Crisis; Financial Institution; Housing Price; Current Population Survey; Economic Downturn (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1057/9780230118355_1

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