Authors: Atif Mian and Amir Sufi
Publisher: University of Chicago Press, 2014
The Great American Recession resulted in the loss of 8 million jobs between 2007 and 2009. More than 4 million homes were lost to foreclosures. Is it a coincidence that the United States witnessed a dramatic rise in household debt in the years before the recession — that the total amount of debt for American households doubled between 2000 and 2007 to $14 trillion? Definitely not.
Armed with clear and powerful evidence, Atif Mian, the Theodore A. Wells ’29 Professor of Economics and Public Affairs, and Amir Sufi, the Chicago Board of Trade Professor of Finance at the University of Chicago, reveal how the Great Recession and Great Depression, as well as the current economic malaise in Europe, were caused by a large run-up in household debt followed by a significantly large drop in household spending. Mian and Sufi argue strongly with data that current policy is biased toward protecting banks and creditors.