Causes of the Great Recession of 2007-9: The Financial Crisis is the Symptom Not the Disease!
Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER); Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF); Indian School of Business (ISB), Hyderabad
Indian School of Business
Federal Reserve Banks - Federal Reserve Bank of New York
NBER Working Paper No. w15404
Globalization has made it possible for labor in developing countries to augment labor in the developed world, without having to relocate, in ways not thought possible only a few decades ago. We argue that this large increase in the developed world's effective labor supply, triggered by geo-political events and technological innovations, coupled with the inability of existing institutions in the US and developing nations themselves to cope with this shock set the stage for the great recession. The financial crisis in the US was but the first acute symptom.
Number of Pages in PDF File: 38working papers series
Date posted: October 13, 2009
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