Where do you think that the hit will show up first? Housing sector. Finance? Vulnerable developing countries?
On Thu, Jun 17, 2004 at 06:26:29PM -0400, Julio Huato wrote: > Michael Perelman wrote: > > >how much of an interest rate hit, can the economy take without reeling. > > I looked at the Flow of Funds. > > >From 2001Q1 to 2004Q1, total outstanding debt in the U.S. grew at 1.8% > quarterly. I suppose debt tends to grow faster than the GDP, but isn't this > too brisk a pace considering how slow the economy has been? > > Compare to rates of broken-down sectors for same period (in parenthesis the > % of total outstanding debt held by sector): > > Federal gov't (18.2) 1.9% > State & local gov'ts (7) 2.3% > Businesses (32.9) 0.9% > Households (41.8) 2.4% > > Clearly, businesses have been purging their financials since the boom ended. > State & local gov'ts as well as households have become more vulnerable to > shocks, which can reverberate on the financial sector (domestic and foreign) > that has the asset side of these liabilities. > > Julio > > _________________________________________________________________ > �Cu�nto vale tu auto? Tips para mantener tu carro. �De todo en MSN Latino > Autos! http://latino.msn.com/autos/ -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
