Friday, January 16, 2009
Past crises inspire little confidence
The tone of this year’s gathering of the American Economic Association (AEA) in San Francisco, USA (January 3rd to 5th), was set on its first morning, when Kenneth Rogoff of Harvard University outlined the results of new research. The paper looks at the aftermath of past financial meltdowns to gauge just how bad this recession might be. House prices take an average of five years to reach their nadir and fall by 36% in real terms.