Insight & Thought Leadership on the Global Economy

When Mark Zandi talks, people listen. This fine book (Paying the Price) evaluates the policy responses to the financial crisis and the Great Recession in his usual authoritative and objective manner—a rare combination. You should read it. — Alan S. Blinder, Economics Professor, Princeton University, and former Vice Chairman of the Federal Reserve

A More Promising Road to GSE Reform

We are nearly seven years into recovery from a once-in-a-lifetime financial crisis, triggered by widespread failure across virtually every aspect of our housing finance system. While much work has been done to address the flaws of this critical part of the nation’s economy, a major step remains: reforming Fannie Mae and Freddie Mac.

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Housing Finance Reform Steps Forward

Housing finance reform took a big step forward with the recent release of the Housing Finance Reform and Taxpayer Protection Act of 2014.

Read Mark Zandi’s and Cristian de Ritis’ analysis of bipartisan legislation proposed by Senators Tim Johnson (D-SD) and Mike Crapo (R-ID).

Read the full article here.

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Joint Economic Committee

Mark Zandi’s testimony before the Joint Economic Committee on March 26th, 2014:

“Unwinding Quantitative Easing: How the Fed Should Promote Stable Prices, Economic Growth and Job Creation”

The Federal Reserve did an admirable job navigating through the financial crisis that began in 2007, the resulting Great Recession, and the subsequent economic recovery. Without the Fed’s aggressive actions, the financial system would have collapsed and the economy would have suffered a depression.

The Federal Reserve took a range of extraordinary steps to quell the financial panic. It established new credit facilities to provide liquidity to financial institutions and markets. To stabilize the banking system, the Fed required the nation’s largest bank holding companies to conduct stress tests and raise enough capital to withstand the worst credit losses on record.

View the full testimony here.



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Cost of Housing Finance Reform

Efforts to reform the housing finance system have taken on new life. Two pieces of legislation, each with a different vision of the future system, have been drafted in the Senate, the House, and the Obama Administration has recently weighed in on the issues. More legislative efforts are on the way.

Click here for the full report.

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A Budget Battle Postmortem

The 16-day federal shutdown and political brinkmanship around the Treasurydebt ceiling hurt the economy. The hit to fourth quarter real GDP is estimated at $20 billion, equal to half a percentage point of growth. Instead of picking up pace as previously expected, U.S. growth will remain stuck near a lackluster 2%.


Click here to read the full report.

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Senate Banking Committee Testimony

Before the Senate Banking Committee

“Housing Finance Reform: Developing a Plan for a Smooth Transition”

November 22, 2013

Click here for full testimony

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Testimony before the Joint Economic Committee

“The Way Forward From Government Shutdown and Debt-Ceiling Confrontation Toward Long-Term Fiscal Sustainability and Economic Growth”

Mark Zandi discusses why the impasse in Washington over funding the federal government and increasing the Treasury debt ceiling is significantly damaging to the economy.

Click here for full written testimony

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A Road Map to the New Housing Finance System

Debate is heating up pver the future of the nation’s housing finance system. Much of the back and forth has focused on the system’s end state—whether housing finance should be privatized, retain some form of government backstop, or even remain effectively nationalized as it is today. No matter which goal is chosen, however, reform will not succeed without an effective transition. A clearly articulated plan for getting from here to there is vital; otherwise policymakers will be appropriately reluctant to move down the reform path.

Click here for the full report.


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US Macro Outlook: Nearing the Threshold

  • Reported GDP growth has lagged U.S. job creation, but this unusual discrepancy is unlikely to continue.
  • Weak productivity growth post-recession is part of the explanation, as investment in structures has waned.
  • The revival of homebuilding will help kick the U.S. expansion into a higher gear.
  • Slow household formation has created pent-up demand that could push housing starts well above trend.
  • Lenders are poised to open the credit spigot, if regulatory uncertainties are cleared up soon.
  • The Federal Reserve must carefully handle the normalization of monetary policy to avoid knocking the recovery off track.

The pace of U.S. GDP expansion has flagged in recent quarters, but job growth has held firm. If history is a guide, this discrepancy will not continue for long. Either GDP growth will rebound or job growth will founder. The Moody’s Analytics outlook is predicated on the former view: We think the job market will maintain its pace, and that GDP growth will pick up going into next year. The expansion should be in full swing by 2015.

View the full article here.

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Discussing ADP private sector employment up 200,000 in July with CNBC

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