"Although there have been numerous studies of the causes and consequences of the Great Financial Crisis of 2007–2010 in the US and abroad, many of these were undertaken only for a small number of countries and before the financial and economic effects were fully realized and before various governmental policy responses were decided upon and actually implemented. This book aims to fill these voids by providing a more thorough assessment now that the worst events and the regulatory reforms are sufficiently behind us and much more information about these developments is available. It reviews and analyzes the causes and consequences of and the regulatory responses to the Great Financial Crisis, particularly from a public policy viewpoint. In the process, it explores such intriguing questions as: What caused the crisis? How did the crisis differ across countries? What is the outlook for another crisis, and when? This is a must read for those who are trying to find answers to these questions."--$cProvided by publisher.
The 2008-10 financial crisis and the global recession it created is a complex phenomenon that warrants detailed examination. The various essays in the book utilise several alternative paradigms to provide a plausible explanation and a credible cure. This book provides this important analysis in great detail and from different theoretical perspectives, presenting a clearer understanding of what went wrong and expounding misinterpretations of current theories and practices. Thirteen insightful chapters by eminent scholars investigate the background of the crisis and draw lessons for economic theory and policy. They largely illustrate that the roots of the recession lie in the financial sector which, over the past few decades, has expanded considerably in terms of both size and complexity. They show that financial innovation has decoupled the real and financial sectors - not always to the benefit of economic stability - and argue that financial markets should be regulated more astutely in order to reinforce transparency and accountability. The book concludes that economics as a science should give proper weight to financial variables and integrate them into its models.
"Highlights how losses in the US subprime market had spread beyond the confines of the US mortgage sector and the borders of the United States, how risk spreads had ballooned and liquidity in some markets had dried up forcing large financial institutions to report significant losses. Bank runs were no longer the stuff of history." - Cover.
"Historically, the work begins with the first great episode in modern speculation: the Dutch tulip boom of the 1630s, and concludes with the Great Recession of the late 2000s, encompassing nearly 400 years of economic history. Geographically, it includes articles on all the major economies of the world, but with an emphasis on U.S. economic history. The book extensively covers the housing and securities boom of the mid-2000s and the financial crisis and global recession that followed."--Introduction.
A comprehensive look at international financial crises that puts more recent economic meltdowns into perspective Throughout history, rich and poor countries alike have been lending, borrowing, crashing—and recovering—their way through an extraordinary range of financial crises. Each time, the experts have chimed, "this time is different"—claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters. With this breakthrough study, leading economists Carmen Reinhart and Kenneth Rogoff definitively prove them wrong. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes—from medieval currency debasements to today's subprime catastrophe. Carmen Reinhart and Kenneth Rogoff, leading economists whose work has been influential in the policy debate concerning the current financial crisis, provocatively argue that financial combustions are universal rites of passage for emerging and established market nations. The authors draw important lessons from history to show us how much—or how little—we have learned. Using clear, sharp analysis and comprehensive data, Reinhart and Rogoff document that financial fallouts occur in clusters and strike with surprisingly consistent frequency, duration, and ferocity. They examine the patterns of currency crashes, high and hyperinflation, and government defaults on international and domestic debts—as well as the cycles in housing and equity prices, capital flows, unemployment, and government revenues around these crises. While countries do weather their financial storms, Reinhart and Rogoff prove that short memories make it all too easy for crises to recur. An important book that will affect policy discussions for a long time to come, This Time Is Different exposes centuries of financial missteps.
The Euro in the 21st Century clarifies the perception of the euro and empirically demonstrates that the euro has become a true common currency and the Eurozone a true optimal currency area, presenting, in turn, a model to imitate. In order to demonstrate this, this study analyzes the economic and monetary requirements and policies required to introduce a common currency as well as the theoretical underpinnings of both the European integration process and the historical economic, monetary, political, and social circumstances that favoured the creation of the economic and monetary union. Furthermore, this book sheds light on how the current economic and monetary circumstances are affecting the euro project through and analysis of three intertwined issues. It studies how the economic chaos and financial uproar, which has plagued the Eurozone and world economy since 2008, has affected the single-currency regime as well as the current image of the euro worldwide. Moreover it summarizes the lesson to be learnt from what can be considered 'the first euro crisis'. Finally, it thoroughly analyzes the behaviour of the US Federal Reserve, the European Central Bank, and the International Monetary Fund during this crisis. This book draws on and contributes to several bodies of literature within Political Economy, Economics, and International Relations and is particularly relevant at this time given that the current unfolding economic imbalances are causing some Eurozone Member States to rethink their economic and political views concerning the euro.
For most of the first part of the 21st century Greece has been seen as a critical battlefield for the survival of the powerful and the adjustment or extinction of the weak, as if all the historical contradictions of the global financial crisis and the eurozone crisis were concentrated in that tiny part of the world, with a population of just 11 million people and a GDP of less than 2% of that of the European Union as a whole. While the country has been overpowered by the disciplinarian and deeply authoritarian policy mix of ordoliberal/neoliberal rules, as this book attempts to show, there is hope. Defeat does not end the crisis, and crisis means constant opportunity. In this state of affairs, all types of agencies try to take advantage of the conditions and opportunities in order to advance towards positions of power and provide the best of solutions for the class interests they represent. Thus, harsh conflict is inevitable and if history provides a yardstick, it is that in periods of conflict and crisis, the winner, usually, is the one who manages to strike the right political and social alliances at the right time. The editors have assembled in this volume a number of interdisciplinary chapters and arguments which, despite their differences, share the strategic aim of a critique of both neoliberalism/ordoliberalism and new authoritarianism. Chapters examine the eurozone crisis from a variety of angles with reference to Greece, and Greek politics and society. With this collection of heterodox and scholarly essays, the authors and editors aim to offer a progressive understanding of current historical circumstances. Constantine Dimoulas is an Assistant Professor in social administration and evaluation of social programmes at Panteion University, Greece. Vassilis K. Fouskas is Professor of international politics and economics at the University of East London, UK, and the founding editor of the Journal of Balkan and Near Eastern Studies (Taylor & Francis).
Economic policy is facing crises on multiple fronts. With the effects of the last financial crisis still with us, it is now faced with the new challenges of post-Covid economic recovery and dealing with the negative effects of over consumption on the climate. This book explores the future of economic policy in relation to what the author sees as the four great policy challenges of the first half of the 21st century: the after effects of the last financial crisis and the catastrophic impact of the Covid pandemic, secular stagnation, growing poverty and inequality, and globalization. The existence of these economic problems has become increasingly relevant since some of the tools available to public action have become useless. As economists begin to suggest new instruments of economic policy, this book will help the reader understand the nature of the economic and political facts that influence both current and future generations.
This book offers a critical look at prominent theories of financial crisis to try to understand how prepared the profession is for identifying the next financial crisis. An analysis of the first financial crisis of the twenty-first century serves as a starting point for rethinking the efficacy of existing economic models and theories.
At the end of the 20th century, mainstream economics was based on theories which viewed capitalism as a self-regulating system, whereby crises come about due to external shocks and would be automatically corrected by the price mechanism if it was flexible enough. Post-Keynesian economists, however, consider that the business cycle and the crises are endogenously generated. They recommend active policies as a response, though the remedies may be worse than the illness if they are not applied at the right moment and in the right proportions. The first great recession of the 21st century offers post-Keynesian economists an opportunity to prove the realism of their models. It is also a chance to make theoretical improvements, to abandon some hypotheses and to introduce new ones. This book, from a top group of international economists, analyzes the causes, consequences and evolution of the crisis from a variety of post-Keynesian perspectives. It then presents a case for realistic and essential remedies. The book is both theoretical and applied, with a global reach and a particular focus on the European debt crisis.
Shubert analyses the impact of the Austrian 1931 financial crisis on Europe and the Great Depression, by analysing it using theories of financial crises, identifying the causes of the crisis, and examining the market's efficiency in predicting events. He also analyses how the crisis was transmitted to the real sector, and studies the behaviour of the Austrian as well as international authorities.