Macro-Forecast: Continuing Crisis in Housing
Macro-Forecast of Current Events:
Continuing Crisis in U.S. Housing Market
Macro-Forecast of Current Events: Continuing Crisis in U.S. Housing Market
Recent, startling revelations about unethical foreclosure procedures may delay the resolution of thousands of troubled mortgage loans in the U.S. And are quickly becoming a risk for the housing market, and the U.S. economic recovery overall. The breadth of the problem is uncertain, in terms of the amount of loans involved and the period of time it will take to resolve the issue. Given this macro-economic market uncertainty, it is likely that the outlook for housing prices in the U.S. will continue to decline with a bottom expected in the third quarter of this year.
For this paper, I employ a computable general equilibrium (CGE) model. Like the Dynamic stochastic general equilibrium models (DSGE) models, CGE models are often micro-founded on assumptions about preferences, and constraints. CGE models focus mostly on long-run relationships, making them well suited to studying the long-run impact of economic policies. DSGE models instead emphasize the dynamics of the economy over time (often at a quarterly frequency), making them suited for studying business cycles and the cyclical effects of monetary and fiscal policy. (1) Computable general equilibrium modelling for policy analysis and forecasting, PB Dixon, Handbook of Computational Economics, 1996
CGE models are most useful whenever one wishes to estimate the effect of changes in one part of the economy upon the rest.
CGE models are comparative-static, i.e. they model...
The U.S. economy is currently downshifting. Real GDP appears to be growing nearly 2% annualized -- at most -- in the current quarter. This rate is down from 3% during the first half of 2010 (before impending downward revisions), and 4% during the second half of 2009. Weakening support from the monetary and fiscal stimulus, the fading inventory rotation in manufacturing, and the consequences from Europe's debt crisis are an
Banking Sample The banking industry, over the last decade has undergone significant change. Industry regulation such as Dodd-Frank, Basel 3, and international capital requirements have now made the industry safer and more transparent. However, due primarily to the crisis of 2008, some banks are more stable than others. In many instance, due to unethical practices of the past, many banks are now suffering as they struggle to attract market share and
The article concedes, however, that declining business confidence is an absolute danger that must be dealt with and the government not being an active partner with businesses and in favor of the recovery will just make things worse (Pollin, 2010). A similar point is made in a different article that states that the role of fiscal policy in pushing an economy towards recovery cannot be over-estimated or over-analyzed because of
Origins, History of the IMF The International Monetary Fund was first conceived between July 1-22, 1944, at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. The conference was attended by representatives of 45 nations, which were called together in order to plan and lay the groundwork for a cooperative economic framework to solve global financial crises before they occur. One key reason for the conference was to
U.S. ECONOMIC PERFORMANCES IN THE PAST 5 YEARS U.S Economic Performance in the past 5 years Major indicator of healthy state of an economy is the real Gross Domestic Product (GDP) growth rate. The GDP growth rate reveals the performances of an economy. United States is one of the richest country in the world and "has the largest gross domestic product (GDP) in the world." (Jabir, 2009 P. 3171). The country total
3.2.3 Portfolio Diversification of Investment in Global Property Markets Because the global property markets are affected by globalization and specific country / regional factors, means that the overall amounts of risks will vary, the most notable include: transparency and efficiency. Where, each country / region has different on laws and regulations pertaining to the real estate markets. This means that the risks in a number of different markets will depend upon
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