Alan Greenspan House Quotations

The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy.

As the value of assets and liabilities have risen relative to income, we have been confronted with the potential for our economies to exhibit larger and perhaps more abrupt responses to changes in factors affecting the balance sheets of households and businesses,

These changes, assisted by improved prices in asset markets, have left households and businesses better positioned than they were earlier to boost outlays as their wariness about the economic environment abates,

fully appreciate the risk that some households may have trouble meeting monthly payments as interest rates and the macroeconomic climate change.

Financial markets, along with households and businesses, seem to be reasonably well prepared to cope with a transition to a more neutral stance of monetary policy, ... Although many factors may affect inflation in the short-run, inflation in the long-run, it is important to remind ourselves, is a monetary phenomenon.

A slowing in the rate of inventory liquidation will induce a rise in industrial production if demand for those products is stable or is falling only moderately, ... That rise in production will, other things being equal, increase household income and spending.

But it is clear that, for the time being at least, the increase in spending on consumer goods and houses has come down several notches, albeit from very high levels.

Because there was little retrenchment during the cyclical downturn, the potential for a significant acceleration in activity in the household sector is likely to be more limited than in past business cycles,

Through most of last year's slowdown, in contrast to the usual pattern, the household sector was a major stabilizing force, ... As a consequence, although household spending should continue to trend up, the potential for significant acceleration in activity in this sector is more limited.

Overall, the household sector seems to be in good shape,

The housing boom will inevitably simmer down, ... As part of that process, house turnover will decline from currently historic levels, while home price increases will slow and prices could even decrease.

Although layoffs seem to be diminishing, surveys indicate that households continue to be worried about the condition of labor markets,

Although household spending should continue to trend up, the potential for significant acceleration in activity in this sector is likely to be more limited than in past cycles,

...In an economy that already has lost some momentum, one must remain alert to the possibility that greater caution and weakening asset values in financial markets could signal or precipitate an excessive softening in household and business spending,

Lower equity prices and higher financing costs should damp household and business spending, and greater uncertainty and risk aversion may also lead to more cautious spending behavior,