Consumer spending, the engine that fueled economic growth for the past two decades is "out of gas" according to Fazzari. "I continue to worry that the household sector cannot support growth over the next few years the way it did before the recession."
With consumer spending accounting for 70 percent of GDP, he considers it a "matter of arithmetic" that the economy will stagnate over the next few years if American households curtail their spending and borrowing to repair their balance sheets.
"We may see a good quarter here or there," Fazzari says. "But there is no obvious source of medium-term sales growth for business in the next few years to replace the recent consumption boom."
Fazzari documents the extended consumer shopping spree that fueled economic growth in a paper published last year.* The research shows how consumer spending was accompanied by a dramatic rise in household indebtedness. Credit cards were maxed out and real estate assets leveraged to extreme levels. Fazzari posits in the paper that household debt is not only a source of growth for the economy but also a risk of collapse. A conclusion that proved to be prescient of the massive home foreclosures, bank failures and collapse of the credit markets that led to the global economic crisis of 2008.
*"Household Debt in the Consumer Age—Source of Growth and Risk of Collapse," Capitalism and Society (BE Press), volume 3, 1-30, 2008 (with Barry Cynamon).
Melody Walker | Newswise Science News
RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung
The RWI/ISL-Container Throughput Index started off well in 2018
22.02.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung
Satellites in near-Earth orbit are at risk due to the steady increase in space debris. But their mission in the areas of telecommunications, navigation or weather forecasts is essential for society. Fraunhofer FHR therefore develops radar-based systems which allow the detection, tracking and cataloging of even the smallest particles of debris. Satellite operators who have access to our data are in a better position to plan evasive maneuvers and prevent destructive collisions. From April, 25-29 2018, Fraunhofer FHR and its partners will exhibit the complementary radar systems TIRA and GESTRA as well as the latest radar techniques for space observation across three stands at the ILA Berlin.
The "traffic situation" in space is very tense: the Earth is currently being orbited not only by countless satellites but also by a large volume of space...
An international team of researchers has discovered a new anti-cancer protein. The protein, called LHPP, prevents the uncontrolled proliferation of cancer cells in the liver. The researchers led by Prof. Michael N. Hall from the Biozentrum, University of Basel, report in “Nature” that LHPP can also serve as a biomarker for the diagnosis and prognosis of liver cancer.
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In just a few weeks from now, the Chinese space station Tiangong-1 will re-enter the Earth's atmosphere where it will to a large extent burn up. It is possible that some debris will reach the Earth's surface. Tiangong-1 is orbiting the Earth uncontrolled at a speed of approx. 29,000 km/h.Currently the prognosis relating to the time of impact currently lies within a window of several days. The scientists at Fraunhofer FHR have already been monitoring Tiangong-1 for a number of weeks with their TIRA system, one of the most powerful space observation radars in the world, with a view to supporting the German Space Situational Awareness Center and the ESA with their re-entry forecasts.
Following the loss of radio contact with Tiangong-1 in 2016 and due to the low orbital height, it is now inevitable that the Chinese space station will...
Fraunhofer Institute for Organic Electronics, Electron Beam and Plasma Technology FEP, provider of research and development services for OLED lighting solutions, announces the founding of the “OLED Licht Forum” and presents latest OLED design and lighting solutions during light+building, from March 18th – 23rd, 2018 in Frankfurt a.M./Germany, at booth no. F91 in Hall 4.0.
They are united in their passion for OLED (organic light emitting diodes) lighting with all of its unique facets and application possibilities. Thus experts in...
A new scenario seeking to explain how Mars' putative oceans came and went over the last 4 billion years implies that the oceans formed several hundred million...
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