How much the financial crisis cost every American, according to Fed

Sharing is Caring!

From Bloomberg:

America never made up the growth it lost in the 2008 global financial crisis and the recession it triggered. A decade later, U.S. households are still counting the cost.

Gross domestic product remains well below what its 2007 trend would have implied and it’s unlikely the economy will ever make up that lost ground, according to research from the Federal Reserve Bank of San Francisco published Monday. The hit will cost the average American $70,000 in lifetime income, they estimate.

READ  Greatest Financial Event In History Coming In 90 Days (Gold, Silver, Dollar & More)

“Without the large adverse financial shocks experienced in 2007 and 2008, the behavior of GDP would have been very different,” Regis Barnichon and his co-authors write. They find that the hit to growth was persistently 7 percentage points deeper than it would have been in the mild recession that they think would have occurred without the financial meltdown. “This is a large number.”

READ  AMERICAN AIRLINES asking employees to volunteer, help with summer rush…

They arrive at the lifetime income loss by taking per-capita GDP in 2007 and discounting at an annual 5% rate to calculate its present value.

For more from Bloomberg…

653 views

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.