According to the most recent data from the Reuters/University of Michigan Survey of Consumers, consumer confidence is near a fifty-year low. Record rates of foreclosure, declining home values, and rising commodity prices are all driving a negative attitude about the economy. While these conditions cause concern in the United States, International Monetary Fund (IMF) managing director Dominique Strauss-Kahn told the G8 leaders assembled in Japan that these problems have pushed some developing countries to a “tipping point” of starvation.
In this context, a new study by IMF economists Stijn Claessens, Ayhan Kose, and Marco Terrones examines 120 recession episodes in Organisation for Economic Co-operation and Development countries from 1960 to the present. The study finds that recessions driven by asset-price bubbles and credit crunches--two conditions facing the economy today--tend to be longer and deeper than other recessions.
At this AEI forum, Claessens will present his findings. AEI resident fellow Desmond Lachman and Angel Ubide, director of global economics at Tudor Investment Corporation, will comment. AEI resident scholar Vincent R. Reinhart will moderate.
