Economic survey of United States, 1997

Includes bibliography

United States economic outlook: quarterly developments

Includes bibliography

Economic survey of United States, 1998

Includes bibliography

Estudio económico de los Estados Unidos, 1988 = Economic survey of the United States of America, 1988

Incluye Bibliografía

Estudio económico de los Estados Unidos, 1991 = Economic survey of the United States, 1991

Incluye Bibliografía

Las políticas comerciales entre América Latina y los Estados Unidos: una evaluación analítica = Trade policy between Latin America and the United States: an analytical assessment

Incluye Bibliografía

The United States subprime mortgage crisis and its implications for the Caribbean

The bursting of the property bubble – subprime mortgage crisis – in 2007 in the United States has engendered panic, recession fears and turmoil in the global financial system. Although the United States economy grew by 0.6 per cent in the last quarter of 2007, down from 4.9 per cent in the previous quarter, day by day worsening scenarios emerge, from escalating oil prices, to a depreciating dollar and financial institutions’ bailout by the Federal Reserve. Many economists and policy makers share the view that a subprime-led recession – i.e. two consecutive quarters with negative growth – is inevitable and will be much deeper and longer than the 2001 dot-com downturn. Moreover, the critical situation of the financial system has driven some analysts to argue that should the monetary policy response fails to restore confidence among investors, the outcome would be the worst crisis seen since the Great Depression. This pessimism is not only among specialists. Indeed, in late March 2008 the Consumer Confidence Index in the United States recorded its lowest level since February 1992. A recession in the United States will undoubtedly have an important impact on the world economy, despite the continuous rapid growth experienced by emerging economies, particularly China and India. The purpose of this article is threefold: first, to characterize the current situation in the United States economy; second, to discuss the economic policy responses; and finally, to elaborate on how Caribbean economies may be affected.