Home > Uncategorized > Greg Mankiw’s Blog: Lucas on the Great Recession

Greg Mankiw’s Blog: Lucas on the Great Recession

Slides, based on a talk Nobelist Robert Lucas recently gave.

[Excerpts from the slides: -JR]

• In effect, “shadow banking system” was created, uninsured and unregulated.

• The economics of the 2008 “credit freeze” following the Lehman  Brothers failure were identical to the economics of the 1930s bank runs…

• Liquidity is no longer the problem

• Yet business investment remains very low…

• Believe it is more accurate to say that the problem is government is doing too much…

• Is it possible that by imitating European policies on labor markets, welfare, and taxes U.S. has chosen a new, lower GDP trend?

• If so, it may be that the weak recovery we have had so far is all the recovery we will get

via Greg Mankiw’s Blog: Lucas on the Great Recession.

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