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04/16/2025 | News release | Distributed by Public on 04/16/2025 20:39

Is the United States Heading for an Economic Crisis

Is the United States Heading for an Economic Crisis?

Tarek Hassan (from left), Andrea Vedolin, Adam Guren, Natalia Ramondo, and Daniele Paserman shared their insights on trade deficits, the decline of manufacturing, and the likelihood of an economic crisis on April 15 at the Alan and Sherry Leventhal Center.

Business & Law

Is the United States Heading for an Economic Crisis?

A worried panel of Boston University economists fielded questions from the community on Tuesday to help make sense of rapidly changing policies and societal impact

April 16, 2025
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On Tuesday evening, Boston University students and professors crammed into a Bay State Road classroom designed to hold 140 people, eager to hear answers to a not-so-simple question on so many minds today: Are we heading for an economic crisis?

At the front of the room, five BU economists tried to piece together an ever-changing puzzle of current affairs, just five days after the White House imposed a 10 percent minimum tariff on nearly all imported goods. The panel event was facilitated by Daniele Paserman, a BU College of Arts & Sciences professor and economics department chair, and the discussion ranged from tariffs and trade to government debt to manufacturing jobs and from international student safety to the loss of trust between the United States and longtime ally nations like Canada.

"It's easy to get confused and lose track of what's important," Paserman said. "It's useful to get some perspective from our faculty about what's going on. It's not surprising that a lot of the questions are about higher education."

And it was not just tariffs that filled the seats. One of the first questions asked by an audience member: what are the economic consequences of cutting federal funding in academia and revoking visas?

"Really smart people come here, fall in love, stay, and do work that contributes to the global economy. I'm worried about brain drain, and what happens when we kick out really smart people. Disincentivizing smart people from coming here doesn't make sense," responded Adam Guren, a CAS associate professor of economics.

During the event, there were no one-size-fits-all solutions, but the panelists fielded questions, sharing their insights about the rapidly changing economic landscape, from tariffs to funding cuts in education.

Anxiety has heightened on college campuses around the country, with several high-profile cases of international students getting arrested and detained by US Immigration and Customs Enforcement (ICE) in recent weeks, and a number of universities being targeted for broad funding cuts. BU has compiled resources and shared guidance for its international community and anyone concerned about their visa status. All of this instability-as tariffs raise living costs and the stock market fluctuates-has created distress and worry on many campuses, as well as with the general public.

"Uncertainty measures are through the roof," said Tarek Hassan, a CAS professor of economics, during the panel. He recently penned an op-ed arguing that the tariffs are misguided and that America's trade deficit is a sign of financial and technological strength, not a weakness. The administration has argued that imposing tariffs will bring jobs back to the United States and strengthen the economy.

"There's no evidence that these tariffs will bring back manufacturing jobs," Hassan said during the event. "There are ways to do that, like with subsidies and targeted tariffs, but it also takes time to build a supply chain." He pointed out that since many of the policy changes are being done through executive actions, it's likely that after four years they may change again. "No one is making long-term decisions based on a policy that is going away in four years anyway," he added.

There's no evidence that these tariffs will bring back manufacturing jobs.
Tarek Hassan

"It's the wrong medicine to treat the problem," Guren said to the audience.

Natalia Ramondo, a BU professor of economics, also pointed out that over time, the United States has transitioned from creating tangible goods to creating more services that contribute to the global economy. "We export ideas, and import goods," she said. "It's dangerous to erase this, especially in the long term."

All of the panelists, including Andrea Vedolin, a professor of finance at the Questrom School for Business, were less than optimistic about the near-term future economy. They fielded other audience questions: What will happen to the federal reserve? How big a problem is the government's debt? Will inflation and interest rates increase? Will the tariffs work? How can financial regulation protect consumers? With no simple answers or one-size-fits-all solutions, they shared insights to help make sense of a rapidly changing economic landscape.

"We're going to muddle through this somehow," Hassan said. "But I'm worried."

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