Asset and Debt Deflation in the United States: How Far Can Equity Prices Fall?

Philip Arestis and Elias Karakitsos

Economics Public Policy Brief Archive from Levy Economics Institute

Abstract: In an asset and debt deflation, the process of reducing debt by saving and curtailing spending takes a long time, say the authors. Current imbalances and poor prospects for spending in the private sector affect the balance sheets of the commercial banks. The downward spiral between the banks and the private sector induces a credit crunch that adversely affects the U.S. economy, which is vulnerable to exogenous shocks and lacks the foundations for a new, long-lasting business cycle.

References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.levyinstitute.org/pubs/ppb73.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lev:levppb:ppb_73

Access Statistics for this paper

More papers in Economics Public Policy Brief Archive from Levy Economics Institute
Bibliographic data for series maintained by Elizabeth Dunn ( this e-mail address is bad, please contact ).