The Current Economic Crisis and The Great Depression

About the Book

Economists have written about economic expansion and contraction and/or the primary example of it, the Great Depression, as it has been an area of economic thought that seems to evade answers while tempting explanation. In this book the author offers both a descriptive and a quantitative approach which offers new perspectives. Similarities are found between the pre-depression years, and our current economic malaise. The presence of a housing boom and bust in both situations is attributed to individuals reaching home buying age. As this peak of home buying reaches its crest and ages beyond that time of life, a rapid decline in population occurs. This decline is followed by a housing crisis as the number of home buying individuals declines. Foreclosures follow as unemployment increases and incomes decline. Banks suffer as the amount of checkbook money (part of M2) declines. Government may or may not respond with an increase of central bank money (part of M2). Reserves decline if there is a decline of checkbook money or central bank money. Lack of reserves makes it such that banks cannot meet obligations to their customers and further tighten credit. Depositors lose faith in the banking system. The impact of this scenario becomes widespread.
The question raised and addressed by Martin Feldstein (ed.) and contributing authors in The Risk of Economic Crisis (1991), should be answered with a resounding yes. We are in a time where the number of live births in the U.S. peaked in 1960 and was followed by a major decline in live births from 1961-1975. Some mistakenly term 1933-1960 as a baby boom. This was an increase in live births that began in 1933-1934. As this increase and decrease of live births passes through the U.S. economic system, it carries with it economic consequences. Now, we are living in a time that is an accident of our history.

About the Author

The author has been President of Economic & Population Trends since July 2002. He received his graduate education at Syracuse University, Maxwell School of Citizenship and Public Affairs. The focus of his professional career has been conducting research and evaluation projects using experimental as well as longitudinal data to respond to federal and state policy questions. He has produced numerous research papers, policy reports, and analytical studies. He has published in top tier journals, presented at conferences, and to public organizations. This book required research, database development, and writing over the 2000-2010 period.