The Great Recession and the Future of Cities

This paper describes the serious fiscal crisis faced by cities around the world following the Great Recession of 2008. Five years later, the after-effects of this major crisis continue to be felt and limit economic opportunities in cities. Section...

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Bibliographic Details
Main Authors:	Dethier, Jean-Jacques, Morrill, Curtis
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCESS TO CAPITAL ACCOUNTING ACCOUNTING SYSTEMS ADVANCED ECONOMIES AUTONOMY BAILOUT BALANCE SHEET BANK LOANS BANK POLICY BANKING CRISIS BANKING INSTITUTIONS BANKING SYSTEM BANKRUPTCY BANKS BID BOND BOND ISSUERS BONDS BORROWER BORROWING BORROWING CAPACITIES BORROWING COSTS BUDGET DEFICITS CAPACITY BUILDING CAPITAL FORMATION CAPITAL MARKETS CENTRAL BANKS CENTRAL GOVERNMENTS COMMERCIAL BANKS COMMODITY PRICES CONSUMER CREDIT CREDIT MARKETS CREDIT QUALITIES CREDITORS CREDITWORTHINESS CURRENT ACCOUNT CURRENT ACCOUNT DEFICITS CURRENT EXPENDITURES DEBT DEBT CRISIS DEBT OBLIGATIONS DECENTRALIZATION DEFAULTS DEFICITS DERIVATIVE DERIVATIVE PRODUCTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT AUTHORITIES DEVELOPMENT FINANCE DEVOLUTION DOMESTIC CAPITAL DURABLE DURABLE GOODS ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC OPPORTUNITIES EMERGING MARKETS EMPLOYERS EMPLOYMENT ENVIRONMENTAL DEGRADATION ENVIRONMENTAL SUSTAINABILITY EQUITY MARKETS EQUITY RATIO EUROPEAN CENTRAL BANK EXCESS LIQUIDITY EXPENDITURE EXTERNAL SHOCKS EXTERNALITIES FEDERAL RESERVE FINANCIAL CRISIS FINANCIAL DEREGULATION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENT FINANCIAL MANAGEMENT FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STRESS FINANCIAL SUSTAINABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL AUTONOMY FISCAL DEFICITS FISCAL FEDERALISM FISCAL POLICY FLOW OF CAPITAL FORECLOSURES FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT GOVERNMENT FUNDING GOVERNMENT INVESTMENTS GOVERNMENT SPENDING GOVERNMENT SUPPORT HEDGE FUNDS HOLDINGS HOUSEHOLDS HOUSING HOUSING PRICES HUMAN CAPITAL INFORMAL ECONOMY INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE INVESTMENTS INSTITUTIONAL BARRIERS INSURANCE INSURANCE COMPANIES INSURANCE COMPANY INTEREST RATE INTEREST RATE POLICY INTEREST RATES INTERGOVERNMENTAL TRANSFERS INTERNATIONAL BANK INVESTMENT BANK INVESTMENT CLIMATE INVESTMENT CORPORATIONS INVESTMENT DECISION INVESTMENT DECISIONS INVESTMENT FUND INVESTMENT PROJECTS INVESTMENT SPENDING INVESTMENT STRATEGIES JOB OPPORTUNITIES LABOR UNIONS LAND PRICES LARGE CITIES LEGAL CONSTRAINTS LEGAL FRAMEWORKS LEGISLATION LIQUIDITY CRISIS LOCAL CAPITAL EXPENDITURES LOCAL ECONOMIES LOCAL ECONOMY LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL INFRASTRUCTURE LOCAL PUBLIC FINANCE LOW INTEREST RATE LOW-INCOME BORROWERS MARKET STABILITY MARKET VALUE METROPOLITAN AREAS MICROFINANCE MIGRANT WORKERS MONETARY FUND MONETARY POLICY MONEY MARKET MONEY MARKETS MORTGAGE MORTGAGE DEBT MORTGAGE MARKET MORTGAGE SECURITIES MORTGAGES MULTINATIONAL MUNICIPAL DEVELOPMENT MUNICIPAL GOVERNMENTS MUNICIPALITIES MUTUAL FUNDS NATURAL RESOURCES ONLINE SYSTEM PENSION PENSION FUNDS PRIVATE CAPITAL PRIVATE INVESTMENT PRIVATE INVESTORS PRODUCTIVITY PROPERTY TAXES PUBLIC DEBTS PUBLIC FINANCES PUBLIC INVESTMENT PUBLIC INVESTMENTS PUBLIC SERVICES PUBLIC TRANSPORT PUBLIC TRANSPORTATION RATING AGENCIES REAL ESTATE REAL PROPERTY RECESSION RECESSIONS REINVESTMENT REINVESTMENTS REMITTANCES RESIDENTIAL MORTGAGE RETURNS REVENUE SHARING RISK MANAGEMENT RISK MANAGEMENT STRATEGIES SAVINGS SECONDARY MORTGAGE MARKET SECURITIES SHORT-TERM FINANCING SOCIAL CAPITAL SOCIAL SERVICES SOCIAL WELFARE SOVEREIGN DEBT START-UPS SUBNATIONAL FINANCE SUBNATIONAL GOVERNMENTS TAX TAX COMPLIANCE TAX RATES TAX REFORM TELECOMMUNICATIONS TRADE UNIONS TRANCHES TRANSITION COUNTRIES TRANSPORT TREASURY TREATY UNEMPLOYMENT UNION URBAN AREAS URBAN CONGESTION URBAN DEVELOPMENT URBAN ECONOMIES URBAN GOVERNMENTS URBANIZATION VILLAGES WEALTH EFFECT
Online Access:	http://documents.worldbank.org/curated/en/2012/11/16963182/great-recession-future-cities http://hdl.handle.net/10986/19882

Description
Summary:	This paper describes the serious fiscal crisis faced by cities around the world following the Great Recession of 2008. Five years later, the after-effects of this major crisis continue to be felt and limit economic opportunities in cities. Section 1 summarizes how the crisis was triggered and how it unfolded in the US, then spread to the rest of world -- highlighting the links between financial sector and housing sector. Section 2 discusses the impact of the crisis on urban revenue and expenditure, and the stimulus programs and recovery plans devised as a short term response by cities around the world. Section 3 then discusses longer term strategies to ensure the financial, social and environmental sustainability of cities. The authors make the point -- and back up our assertions with specific examples -- that urban decision-makers must take a long view and find ways to create opportunities for their citizens, making sure that their decisions are financially sustainable in the long term. Today's decisions should not lock cities out of options tomorrow, and cities must be managed with flexibility so as to adapt to unforeseen new circumstances. The authors also argue that, while there has been a lot of talk about "smart cities" and new technologies among urban specialists and urban planners, it is ultimately the focus on basic economics (sustainable financing, providing good services to consumers and incentives for providers), good governance and good institutions that will create sustainable, dynamic and livable cities.

The Great Recession and the Future of Cities

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