The State of Business in America
Wharton faculty weigh in on these historic economic times

Foreclosures are at record levels, threatening thousands of homeowners with eviction. More workers have joined the unemployment line. Grocery bills are rising, and Goldman Sachs is predicting that oil could hit $200 a barrel in a few years. “Stagflation” has reentered the national vocabulary.

It’s starting to feel like the 1970s all over again. Or is it?

The 20,000 jobs the economy lost in April was not as bad as expected, and the unemployment rate of 5 percent remains low by historical standards. Retailers are suffering, but consumers are still filling their shopping carts: Costco Wholesale Corp. and Wal-Mart Stores reported better-than-expected April sales.

At Wharton, professors pore over business data to divine where the economy is headed. In late spring, we asked six of them to weigh in on housing, the Fed’s recent behavior, and whether it’s fair to call this downturn a recession, among other topics. Their varied opinions follow.

Susan M. Wachter, Richard B. Worley Professor of Financial Management

Franklin Allen, Nippon Life Professor of Finance and Co-Director of the Wharton Financial Institutions Center

Jeremy Siegel, Russell E. Palmer Professor of Finance

Richard J. Herring, Jacob Safra Professor of International Banking and Co-Director of the Wharton Financial Institutions Center

Peter Cappelli, George W. Taylor Professor of Management and Director of the Wharton Center for Human Resources

Stephen J. Hoch, Patty and Jay H. Baker Professor of Marketing and Director of the Jay H. Baker Retailing Initiative

Excerpted from the Summer 2008 Alumni Magazine.