Former U.S. Secretary of the Treasury Timothy F. Geithner and Professor Andrew Metrick survey the causes, events, policy responses, and aftermath of the recent global financial crisis.
Lecture: European Growth and Unemployment
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与讲师见面
Andrew MetrickMichael H. Jordan Professor of Finance and Management
Yale School of Management
Timothy GeithnerLecturer in Management, Yale SOM, Former U.S. Secretary of the Treasury
Yale School of Management
[MUSIC]
>> The global financial crisis caused a deep recession.
And after a brief recovery, this morphed into what we now call the Eurozone crisis,
which cause a second recession in the countries that use the Euro.
In this graph you can see this double dip recession very clearly.
Along the y axis is real GDP quarter on quarter growth rates, annualized.
And along the x axis is time.
So we can see that in the, in 2008 was the last time
that there was positive growth before the global financial crisis.
And towards the second half of 2008, this morphs into negative growth.
And after two consecutive quarters of negative growth,
that's a standard workday definition of a recession.
And so that begins in 2008, and it deepens significantly as we move into 2009.
Until the Eurozone countries actually have nearly -3% GDP quarter on quarter growth.
They recovered from the recession as we did in the United States in early 2010.
And have weak growth always below 1% up for the next year and a half to two years.
And then we see the double dip recession, so
a second recession coming off of really the same original event
of the global financial crisis for which it never really recovered.
And this negative growth recessed until the end of 2013 where growth
remains very, very sluggish as we go through towards the end of 2014.
This deep recession, and then brief recovery followed by double dip recession,
really can be seen, not just in the GDP figures, but
in numbers that have much more of a social effect, which is the unemployment figures.
This graph shows unemployment, overall unemployment,
and youth unemployment in the Eurozone along with wages.
On the left-hand side, we plot the overall unemployment rate and
the unemployment rate for youth, which I believe is defined here as under 25.
The overall unemployment rate
starts higher in Europe than it does in the United States.
Europe always has had slightly higher reported unemployment rates for
reasons that are not completely understood,
but in part have to do with a slightly larger underground economy.
That unemployment rate peaks here at close to 12% in 2013.
The youth unemployment rate Is much more significant effect.
That starts off at about 17.5% and peaks near 25% in 2013.
This level of unemployment is very,
very difficult to maintain socially and politically.
And is one of the reasons that you see a rise of labor friendly parties
in many Eurozone countries, particularly Eurozone countries in the periphery,
Portugal, Spain, Greece, Italy, that have had the most severe problems.
In addition to unemployment falling, can also see that the year on year growth
rate for wages Is at a lower level than it was earlier.
Now you might believe why doesn't this fall and become negative?
A negative growth rate in compensation per employee might help to
ease the unemployment process.
Part of the reason that that's a challenge has to do with the types of labor laws
that exist in these countries and the restrictions of being under a single
currency which doesn't allow individual countries to inflate away and
get a lower real growth rate for their compensation per employee.
We'll talk more about that in the next module.
It's important to note that the economic effects of the global financial crisis.
And it's aftermath were much worse int he Eurozone than in the United States.
They start off looking fairly similar.
But while the United States recovers,
the Eurozone runs in to the double dip recession.
You can see that graphically in this picture.
Real GDP is plotted on the left picture for the United States and for
the Euro area.
It starts off and it's indexed to 100 at the beginning of 2008.
Both the Euro area and the United States fall during the global financial crisis.
And then both recover.
But in late 2010, early 2011, when the United States starts on a path
of continuing upward growth, the Euro area falls back down again and
only sluggishly recovers towards the end of 2013.
Real GDP per capita,
which somewhat dampens the effect since the United States has somewhat
faster population growth than the Euro area, shows much the same pattern.
Dropping off during the global financial crisis, recovery through 2010,
and then continued recovery in the United States and falling off in the Euro area.
The difference between these two economic outcomes is important and
really is the reason why, as I stand here today,
we would call it a continuing crisis in the Eurozone.
>> [MUSIC]
