... Median Sales Price,
Existing Single-Family Homes Sold
0402009896949290888684828 078 7 674 7 270 68
Part I
FINANCIAL MARKETS AND
MONETARY POLICY IN
PERSPECTIVE
from the climbing house price, her $80,000 ... years’
time I’ll be on my way to riches, and he’ll be frozen in his middle-
class existence!”
The ABCs of Risky Finance • 27
Figure 2.1
0402009896949290888684828 078 7 674 7 270 6866...
... at Stabilizing Our
Economic Future
Times change. Ben Bernanke, Greenspan’s successor, declared in Octo-
ber 2008 that asset markets needed to be added to the Fed’s list of poten-
tially destabilizing ... source
of supply . . . which commands a decisive cost or quality advan-
tage and which strikes not at the margins of the profits and the
outputs of the existing firms but at their f...
... infla-
tion and interest rates is the catalyst for recession. And housing
investment, without exception, plunges (Figure 10.1).
126 • T
HE
C
OST OF
C
APITALISM
82818 079 7 877 7 675 7 473 7 271 706968 676 66564636261
2500
2000
1500
1000
500
In ... football through the uprights and join the crowd of believers. And I
hem, Doc, and I haw. And, I twist and turn. But the crowd grows m...
... hockey tournament, I was driving my eldest son and
One Practitioner’s Professional Journey • 1 97
midterm and an easy A for the course. Economics, thereafter, framed
my thinking.
Microeconomic ... more complex. One of the
courses required for my major was entitled Resource Management
and Conservation. To take the course, I had to take a year of
economics. And in 1 972 , I had two ep...
... United States and in many developed
world housing markets. Left to their own devices, the various world
210 • T
HE
C
OST OF
C
APITALISM
Figure 16.1
08060402009896949290888684828 078 7 674 7 270 68666462
130
105
80
55
30
Share(%)
Rescue ... Should All
Believe?” American Economic Review, vol. 87, no. 2, May 19 97.
Dynam, Karen E., and Donald L. Kohn. “The Rise in U.S. Household In-
debte...
... forward.
The Markets Stoke the Boom and Bust Cycle • 23
Figure 2.1
0402009896949290888684828 078 7 674 7 270 686664626058565452
15
10
5
0
−5
Year over Year % Change
The Great Inflation of the 1960s-1 970 s
Gave ... Single-Family Homes Sold
0402009896949290888684828 078 7 674 7 270 68
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• 15 •
Chapter 2
THE MARKETS STOKE THE
BOOM AND BUST CYCLE
It is a jo...
... economy, economic agents in all sectors are
compelled to make both brick -and- mortar and lending and borrowing
decisions. As households, corporations, governments, and central
banks make investment and ... an economic hereafter.
Financial Markets as a Source of Instability • 45
And in the real world, people go off the deep end, with painful
regularity. Our framework for thin...
... Themselves
Automatically Selling into a Collapsing Market.
Dow Jones Industrial Average Index
Figure 7. 1
A Model Aimed at Stabilizing Our
Economic Future
Times change. Ben Bernanke, Greenspan’s ... Index
08 070 605
Figure 5.3
orders. And most of the sell orders were triggered at around the same
price level for the overall market. When the economy surprised on
the upside in 19...