Business Case Studies & Business Publications

Whither the U.S. Economy?

Warnock, Francis E...

Case

Whither the U.S. Economy?

Warnock, Francis E.; Rodriguez, Peter L.

BP-0542 | Published May 14, 2009 | 24 pages Case

Collection: Darden School of Business

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The nine months leading up to April 2009 were among the most difficult and uncertain in U.S. economic history. A series of destabilizing events had led to substantial uncertainty and panic throughout the economy: Three of the five largest U.S. investment banks had failed, the stock market had fallen by 40%, the Fed had doubled its balance sheet, and the federal budget deficit had expanded to well over $1 trillion. Moreover, the crisis had spread from the United States to the world's leading economies and seemed to signal the beginning of an extraordinary rebalancing of the world economy. This case explores the challenge facing the U.S. economy in spring 2009, the global economic forces and trends affecting the economy, and the likely course of key macroeconomic variables: real and nominal interest rates, exchange rates, GDP growth, inflation and budget deficits.