Honors Theses
Date of Award
Spring 5-10-2025
Document Type
Undergraduate Thesis
Department
Economics
First Advisor
Henry Thompson
Second Advisor
Garrett Scott
Third Advisor
Jon Moen
Relational Format
Dissertation/Thesis
Abstract
The 2008 financial crisis revealed differences in economic recovery patterns between businesses and households. This study analyzes the asymmetry in loan delinquency rates between commercial and residential sectors, with data showing commercial rates peaked at 8.51% in 2010 while residential rates reached 10.88%, followed by significantly different recovery trajectories.
The research investigates how differing legal protections created varying incentives to cut costs. Through analyzing Federal Reserve data, Census Bureau surveys, and expenditure records, this study found the commercial sector recovered 64% within three years of its peak, compared to only 17% for the residential sector.
During the recession, businesses reduced spending by 18.8%, while households cut back just 1.8%. Government subsidies had nearly identical weighted impacts on both sectors, at 9.3% versus 9.2%, indicating subsidies cannot explain the recovery differences. The findings suggest that greater cost-cutting ability and fewer legal protections were key factors enabling firms to recover more quickly than households.
Recommended Citation
Flynn, Avery J., "Asymmetric Recovery: Understanding the Differences in Commercial and Residential Recovery Patterns Following the 2008 Financial Crisis" (2025). Honors Theses. 3315.
https://egrove.olemiss.edu/hon_thesis/3315
