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| Content Provider | OECD iLibrary |
|---|---|
| Organization | OECD |
| Abstract | After a long period of robust growth, the US economy has been struck by a confluence of adverse developments in reaction to past excesses during the upswing, as well as to exogenous shocks. The sharp housing downturn and the associated turmoil in financial markets have led to higher risk premiums, lower equity wealth and tighter credit standards, thereby hurting real activity. This has happened at a time when policymakers already had to grapple with persistent external imbalances and unsustainable fiscal trends. While financial intermediaries have suffered from heavy write-downs, the household sector has also paid a heavy tribute of eroding real incomes, job losses, home foreclosures and declining wealth. The authorities have chosen to provide macroeconomic policy support to avert a prolonged decline of output, while keeping inflation expectations in check, but activity is nonetheless likely to get weaker before it gets better. Over time, these shocks will be absorbed and the economy will return toward its robust path of potential growth. Nevertheless, a variety of fiscal, social and environmental problems needs to be overcome. In this light, the present Survey discusses three important policy issues |
| Page Count | 17 |
| Starting Page | 11 |
| Ending Page | 21 |
| Language | English |
| Publisher | OECD Publishing |
| Publisher Date | 2008-12-09 |
| Access Restriction | Open |
| Subject Keyword | Economics |
| Content Type | Text |
| Resource Type | Chapter |
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