{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Debt & Sticky Prices

Debt & Sticky Prices - Federico Nusymowicz Lecture 22...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Federico Nusymowicz Lecture 22 Explain what have happened with the debt levels of households, corporations, and the Government in the U.S. during the last 50 years. Use the handout on Outstanding debt from Lecture 22. In 1950, the government’s outstanding debt to GDP ratio was high (almost 0.9), which is expectable right after WWII. From then on, it showed a steadily declining pattern right up to 1981, when Reagan’s administration began in full swing and drove government debt back up. This pattern continued right up until 1996, when the debt ratio slightly decreased, only to start climbing back up again during the 2001 recession to the current level of 0.64. The corporate debt to GDP ratio is much easier to explain because it has followed, for the last 5 decades, a clear upward trend with relatively few fluctuations. Starting at 0.52, today the ratio is more than double, at 1.16. The household debt to GDP ratio shares this pattern, with the notable exception of a plateau from the late 60’s to the early 80’s, within which the ratio fluctuated between .45
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern