On Sep 19, 2011, at 11:27 AM, Bill Lear wrote: > So, how does high unemployment lead to financial instability? Do you > mean that low GDP growth (from high unemployment) increases financial > instability?
People can't service debts if they're losing jobs, and businesses can't if revenues are slowing. > Unemployment was well under 5% in 2006 and 2007, and growth, while not > terrific, was not terrible, and yet we shortly thereafter had a huge > financial crisis. Growth slowdowns typically precede financial crises. So in the U.S. we had: 2003 2.5% 2004 3.5 2005 3.1 2006 2.7 2007 1.9 2008 -0.3 2009 -3.5 There was a slowdown of 0.8 point from 2004 to 2006, and another 0.8 in 2007. That was enough to expose problems. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
