This Event Has Ended
Recessions are normally assumed to be short-run fluctuations of output around a long-run equilibrium path. But the large size and long duration of the Great Recession has raised questions about its possible long-run effects. Moving beyond the short-run analysis of the current economic situation, this conference will investigate potential long-term impacts of both the 2007-08 financial crisis and the economic downturn that followed. What structural economic changes have occurred during the Great Recession, and what are their implications? Each session of the conference focuses on long-term (beyond the recovery) or even permanent effects of the economic crisis within a specific arena.
Presentations and full agenda available here.
Agenda
Tuesday, October 18
7:00 a.m. |
Breakfast |
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8:15 a.m. |
Conference Commencement & Welcome |
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Eric S. Rosengren President and Chief Executive Officer Federal Reserve Bank of Boston |
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The morning sessions will be moderated by Mary Burke, Senior Economist, Federal Reserve Bank of Boston | ||
8:30 a.m. |
The Statistical Behavior of GDP after Financial Crises and Severe RecessionsDo severe recessions associated with financial crises leave permanent scars on the economy? The opening session will set the stage for the conference by discussing the statistical evidence on long-term effects of these economic setbacks, looking across nations as well as historically in the United States. Do these setbacks cause large and permanent reductions in aggregate GDP relative to previous trends? If economies eventually recover back to trend, how long do these recoveries typically take? |
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Presenter: |
David H. Papell
Ruxandra Prodan “The Great Slump is Not Yet Half Over”
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Discussants: |
Jeremy Piger
James Stock |
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10:00 a.m. |
Break |
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10:30 a.m. |
The Economic Implications of Shifts in Attitudes after the Great RecessionUsing social surveys, some economists have found that cohorts who live through difficult economic times adopt specific attitudes towards risk and other economic variables over their lifetimes. What does this research imply for long-term economic trends? Will the severe recession make people save more over their entire lives, or alternatively, will the portfolio preferences of savers change after the crisis – will they save more in less risky assets? Are the potential shifts in economic attitudes large enough to have long-term impacts on the macroeconomy? |
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Presenters: |
Anat Bracha
Julian Jamison |
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Discussant: |
Stefan Nagel
Antonio Spilimbergo |
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12:00 p.m. |
Luncheon |
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1:15 p.m. | Keynote Address: |
The Honorable Ben S. Bernanke |
The afternoon sessions will be moderated by Jeff Fuhrer, Executive Vice President and Senior Policy Advisor, Federal Reserve Bank of Boston | ||
2:00 p.m. |
The Effects of the Great Recession on the U.S. Labor MarketHow will the Great Recession alter the long-term quantity and distribution of human capital across individuals, demographic groups, and birth cohorts in the United States? There is some evidence that severe recessions place younger cohorts at an economic disadvantage—regarding employment and earnings prospects—for the rest of their lives. Should these concerns be relevant for young people today and do they have implications for the NAIRU? Additionally, what do the wage experiences of displaced workers imply for the lifetime earnings of today’s unemployed? What are the effects on long-term labor market flows and earnings trends of the negative shock to job tenure (for all age groups) caused by the Great Recession? What do we know about the interaction of labor market institutions and hysteresis, and have U.S. labor market institutions become more or less flexible (long-term) as a result of the Great Recession? |
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Presenters: |
William T. Dickens
Robert K. Triest |
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Discussants: |
Gary Burtless
Bart Hobijn |
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3:30 p.m. |
Break |
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4:00 p.m |
A New World for the Housing Market and the GSEsHousing obviously played a large part in the financial crisis, but no one is sure how the housing market will or should change in the future. Recently, the Obama Administration offered reform alternatives for the largest players in the housing market---the Government Sponsored Entities (GSEs), Fannie Mae and Freddie Mac. This session will discuss GSE reform within the wider context of the appropriate government role in housing finance. Are Fannie and Freddie needed to ensure a well-functioning housing market or did they help create the moral hazard problems that contributed to the recent crisis? Would winding them down to create a mostly private system of housing finance affect the types of mortgages that Americans use, reduce homeownership among particular groups, or make the housing-finance system more vulnerable to adverse economic shocks? What can we infer from other nations’ institutions, policy approaches, and experiences? |
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Presenter: |
Phillip L. Swagel |
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Discussants: |
Deborah J. Lucas
Susan M. Wachter |
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5:30 p.m. | Reception & Dinner |
Wednesday, October 19
7:00 a.m. |
Breakfast |
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8:30 a.m. | Conference Address: |
Eric S. Rosengren |
The sessions will be moderated by Martin Feldstein, George F. Baker Professor of Economics, Harvard University | ||
9:00 a.m. |
Fiscal Policy as a Stabilization ToolAfter years on the sidelines, countercyclical fiscal policy made a comeback during the Great Recession. Federal stimulus dollars provided direct help for the unemployed and other affected groups, aid for state and local governments struggling under balanced-budget requirements, tax cuts to individuals and businesses, and support for public investments. Did the Great Recession teach us anything about the effectiveness of fiscal policy as a stabilization tool? Did some types of stimulus have more “bang for the buck” than others, or add more effectively to the public capital stock? And what is the future for countercyclical fiscal policy, in light of the ongoing concern about the federal budget deficit? |
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Presenter: |
Antonio Fatás
Ilian Mihov |
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Discussants: |
Silvia Ardagna
Gauti B. Eggertsson |
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10:30 a.m. |
Break |
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11:00 a.m. |
Panel Discussion: Will the Federal Reserve Be Able to Serve as Lender of Last Resort in the Next Financial Crisis?Like many central banks, the Federal Reserve functions as a lender of last resort. In particular, the Fed’s emergency lending programs played a key role in maintaining liquidity during the worst of the recent financial crisis. Yet the Fed’s lending powers have been curtailed by the Dodd-Frank Act. Will the removal of 13(3) lending authority make financial markets less stable, or will the new restrictions be internalized by forward-looking traders? And how are the Fed’s new responsibilities for systemic regulation affected by the new emergency-lending limitations? |
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Panelists: |
James Segel
Simon Johnson
Donald Kohn |
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12:30 p.m. |
Luncheon |
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2:00 p.m | Conference Adjournment |