The Great Recession has destroyed the possibility of consuming and investing on cheap and easily available credit without regard to quality. Households in major industrial countries will have to borrow less and save more than they did before the crisis. At the moment, interest rates are extremely low while central banks try to offset the withdrawal of credit from financial institutions, but when rates return to normal levels the new reality of expensive credit will register fully.
Filed under: Economic Crisis, Economic research, Emerging Markets, Fiscal Stimulus, Globalization, growth | Tagged: 1970s, Banking crisis, gold, Great Depression, Great Recession, McCracken Report, stagflation | 3 Comments »
