Thursday, February 28, 12:15 - 1:30, Bulger Communication Center South
"After the Financial Crisis: Households in Peril"
Dr. Leclaire’s talk looks at the structure of household debt relative to the debt held by the Government, Business and the Rest of the World. She explains that household debt cannot continue to support economic growth. Business must start spending again for new growth to be sustainable.
From the late nineties through 2008, most increases in household debt took the form of mortgages used to purchase homes, improve existing properties and consolidate other types of debt. As the regular mortgage market became saturated, lenders extended a variety of tricky mortgages to households previously denied mortgages: low-income households in particular. This extension of credit to low-income households led to some renewal of many urban centres. With the financial crisis, however, these same urban centres were decimated when those households were faced with changes in both the terms of credit and their ability to pay. Now, many of these same households are denied mortgages, but are presented with expensive credit card and other debt, which they are using to cover basic living expenses in the absence of steady employment. The health of a city depends crucially on the level of employment, which sustain the ability to pay mortgages and other debt. Thus, clearing existing household debt through job-creation is potentially the most powerful way to sustainably renew a city.
Dr. Leclaire is Associate Professor of Economics and Finance. She teaches Principles of Macroeconomics and Econometrics. Her recent publications include: Households after the Financial Crisis (2012), in the Post Keynesian Economics Forum, Budget Deficits (2012) in the Elgar Companion to Post Keynesian Economics, 2nd Edition, and an edited book with Tae-Hee Jo and Jane Knodell (2011), Heterodox analysis of financial crisis and reform: History, Politics and Economics. Her previous publications include US deficit control and private sector wealth (2008) Journal of Post Keynesian Economics, Seeking full employment in a modern world (2008) International Journal of Political Economy, and her first book The Great Deficit Debacle: Causes and Consequences of American Federal Budget Surpluses and Deficits (2007).
Leclaire is also an invited Research Associate at the International Economic Policy Institute, Laurentian University since 2008 and has been an elected Steering Committee Member for the Progressive Economics Forum (Canada) since 2005.