Real economy causes of the Great Deprivation of early 21st Century

Nadeem Naqvi

MPRA Paper from University Library of Munich, Germany

Abstract: The American economy has undergone a dramatic structural change in the first decade of the 21st Century. The real-economy causes of this transformation, and their expression via the real estate market and its financial derivatives’ market, and their final manifestation in world financial markets, is explained using traditional economic theory. A three-sector Walrasian general equilibrium model, and a non-Walrasian temporary equilibrium model with fixed prices and quantity constraints, are both utilized to explain the real-economy causes of the observed stylized facts. Some remedies that will likely work, and ones that will not, are also identified. (95 words)

Keywords: financial crisis; credit crunch; mortgage backed securities; fiscal policy; monetary policy; the U.S. economy; outsourcing; international capital mobility (search for similar items in EconPapers)
JEL-codes: D3 D5 E3 E5 F1 F2 (search for similar items in EconPapers)
Date: 2008-11-04
New Economics Papers: this item is included in nep-dev, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:11369

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