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Winter 2009 • Volume 15, Issue 1

Bradley professors address financial crisis

Every day for the past few months, the nation’s financial crisis has been making headlines. Most recently, the focus has been on a bailout for automakers. Earlier this fall, the nation saw bailouts in the home lending industry after the speculative bubble in the housing market collapsed. Spurred by lower interest rates, federal policies promoting home ownership, and other factors, the housing index has risen by 83 percent since 1997.

“That kind of growth cannot be maintained,” said Dr. Robert Scott, Bradley professor of economics and department chair, as he showed a chart created by Yale economist Robert J. Shiller tracking the American housing market since 1890. The chart shows that when there were housing booms in the 1970s and 1980s, the market corrected itself and prices went back down. Is this a “correction”? What are the roots of the current problem?

A slide presentation from the Robert T. Stevenson Jr./National City Bank Lecture Series may be viewed on the Bradley economics web site. Watch for an article about the financial crisis in the Spring 2009 issue of Bradley Hilltopics.

Bradley professors address financial crisis

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