Download or read book The Fisher Effect and the Financial Crisis of 2008 written by David Glasner and published by . This book was released on 2018 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper uses the Fisher equation relating the nominal interest rate to the real interest rate and expected inflation to provide a deeper explanation of the financial crisis of 2008 and the subsequent recovery than attributing it to the bursting of the housing-price bubble. The paper interprets the Fisher equation as an equilibrium condition in which expected returns from holding real assets and cash are equalized. When inflation expectations decline, the return to holding cash rises relative to holding real assets. If nominal interest rates are above the zero lower bound, equilibrium is easily restored by adjustments in nominal interest rates and asset prices. But at the zero lower bound, nominal interest rates cannot fall, forcing the entire adjustment onto falling asset prices, thereby raising the expected real return from holding assets. Such an adjustment seems to have triggered the financial crisis of 2008, when the Federal Reserve delayed reducing nominal interest rates out of a misplaced fear of inflation in the summer of 2008 when the economy was already contracting rapidly. Using stock market price data and inflation-adjusted US Treasury securities data, the paper finds that, unlike the 2003-2007 period, when stock prices were uncorrelated with expected inflation, from 2008 through at least 2016, stock prices have been consistently and positively correlated with expected inflation.
Download or read book Financial Crises Explanations Types and Implications written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2013-01-30 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.
Download or read book The Money Illusion written by Scott Sumner and published by University of Chicago Press. This book was released on 2021-09-28 with total page 415 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first book-length work on market monetarism, written by its leading scholar. Is it possible that the consensus around what caused the 2008 Great Recession is almost entirely wrong? It’s happened before. Just as Milton Friedman and Anna Schwartz led the economics community in the 1960s to reevaluate its view of what caused the Great Depression, the same may be happening now to our understanding of the first economic crisis of the 21st century. Forgoing the usual relitigating of problems such as housing markets and banking crises, renowned monetary economist Scott Sumner argues that the Great Recession came down to one thing: nominal GDP, the sum of all nominal spending in the economy, which the Federal Reserve erred in allowing to plummet. The Money Illusion is an end-to-end case for this school of thought, known as market monetarism, written by its leading voice in economics. Based almost entirely on standard macroeconomic concepts, this highly accessible text lays the groundwork for a simple yet fundamentally radical understanding of how monetary policy can work best: providing a stable environment for a market economy to flourish.
Download or read book Financial Crises written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2014-02-19 with total page 754 pages. Available in PDF, EPUB and Kindle. Book excerpt: The lingering effects of the economic crisis are still visible—this shows a clear need to improve our understanding of financial crises. This book surveys a wide range of crises, including banking, balance of payments, and sovereign debt crises. It begins with an overview of the various types of crises and introduces a comprehensive database of crises. Broad lessons on crisis prevention and management, as well as the short-term economic effects of crises, recessions, and recoveries, are discussed.
Download or read book What Happens During Recessions Crunches and Busts written by Mr.Ayhan Kose and published by International Monetary Fund. This book was released on 2008-12-01 with total page 77 pages. Available in PDF, EPUB and Kindle. Book excerpt: We provide a comprehensive empirical characterization of the linkages between key macroeconomic and financial variables around business and financial cycles for 21 OECD countries over the period 1960–2007. In particular, we analyze the implications of 122 recessions, 112 (28) credit contraction (crunch) episodes, 114 (28) episodes of house price declines (busts), 234 (58) episodes of equity price declines (busts) and their various overlaps in these countries over the sample period. Our results indicate that interactions between macroeconomic and financial variables can play major roles in determining the severity and duration of recessions. Specifically, we find evidence that recessions associated with credit crunches and house price busts tend to be deeper and longer than other recessions. JEL Classification Numbers: E32; E44; E51; F42
Download or read book The Purchasing Power of Money written by Irving Fisher and published by . This book was released on 1911 with total page 558 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Return of Depression Economics written by Paul R. Krugman and published by W. W. Norton & Company. This book was released on 1999 with total page 202 pages. Available in PDF, EPUB and Kindle. Book excerpt: The author of "The Age of Diminished Expectations" returns with a sobering tour of the global economic crises of the last two years.
Download or read book Brookings Papers on Economic Activity Spring 2012 written by Herman Royer Professor of Political Economy David H Romer and published by Brookings Institution Press. This book was released on 2012-08-31 with total page 423 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Brookings Papers on Economic Activity" (BPEA) provides academic and business economists, government officials, and members of the financial and business communities with timely research on current economic issues. Contents - Democratic Change in the Arab World, Past and Present Eric Chaney (Harvard University) - Disentangling the Channels of the 2007-2009 Recession James Stock (Harvard University) and Mark Watson (Princeton University) - Macroeconomic Effects of FOMC Forward Guidance Jeffrey Campbell, Charles Evans, Jonas Fisher, and Alejandro Justiniano (Federal Reserve Bank of Chicago) - Is the Debt Overhang Holding Back Consumption? Karen Dynan (Brookings Institution) - The Euro's Three Crises Jay Shambaugh (Georgetown University) - Fiscal Policy in a Depressed Economy J. Bradford DeLong (University of California-Berkeley) and Lawrence Summers (Harvard University )
Download or read book Studies in the History of Monetary Theory written by David Glasner and published by Springer Nature. This book was released on 2021-11-01 with total page 521 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book presents an alternative approach to monetary theory that differs from the General Theory of Keynes, the Monetarism of Friedman, and the New Classicism of Lucas. Particular attention is given to the work of Hawtrey and his analysis of financial crises and his explanation of the Great Depression. The unduly neglected monetary theory of Hawtrey is examined in the context of his contemporaries Keynes and Hayek and the subsequent contributions of Friedman and of the Monetary Approach to the Balance of Payments. Studies in the History of Monetary Theory aims to highlight the misunderstandings of the quantity theory and the price-specie-flow mechanism and to explain their unfortunate consequences for the subsequent development of monetary theory. The book is relevant to researchers, students, and policymakers interested in the history of economic thought, monetary theory, and monetary policy.
Download or read book Finance in America written by Kevin R. Brine and published by University of Chicago Press. This book was released on 2017-11-14 with total page 510 pages. Available in PDF, EPUB and Kindle. Book excerpt: The economic crisis of 2008 led to an unprecedented focus on the world of high finance—and revealed it to be far more arcane and influential than most people could ever have imagined. Any hope of avoiding future crises, it’s clear, rest on understanding finance itself. To understand finance, however, we have to learn its history, and this book fills that need. Kevin R. Brine, an industry veteran, and Mary Poovey, an acclaimed historian, show that finance as we know it today emerged gradually in the late nineteenth century and only coalesced after World War II, becoming ever more complicated—and ever more central to the American economy. The authors explain the models, regulations, and institutions at the heart of modern finance and uncover the complex and sometimes surprising origins of its critical features, such as corporate accounting standards, the Federal Reserve System, risk management practices, and American Keynesian and New Classic monetary economics. This book sees finance through its highs and lows, from pre-Depression to post-Recession, exploring the myriad ways in which the practices of finance and the realities of the economy influenced one another through the years. A masterwork of collaboration, Finance in America lays bare the theories and practices that constitute finance, opening up the discussion of its role and risks to a broad range of scholars and citizens.
Download or read book Financial Markets and Financial Crises written by R. Glenn Hubbard and published by University of Chicago Press. This book was released on 1991-08-13 with total page 420 pages. Available in PDF, EPUB and Kindle. Book excerpt: Warnings of the threat of an impending financial crisis are not new, but do we really know what constitutes an actual episode of crisis and how, once begun, it can be prevented from escalating into a full-blown economic collapse? Using both historical and contemporary episodes of breakdowns in financial trade, contributors to this volume draw insights from theory and empirical data, from the experience of closed and open economies worldwide, and from detailed case studies. They explore the susceptibility of American corporations to economic downturns; the origins of banking panics; and the behavior of financial markets during periods of crisis. Sever papers specifically address the current thrift crisis—including a detailed analysis of the over 500 FSLIC-insured thrifts in the southeast—and seriously challenge the value of recent measures aimed at preventing future collapse in that industry. Government economists and policy makers, scholars of industry and banking, and many in the business community will find these timely papers an invaluable reference.
Download or read book And Yet it Moves written by David Miles and published by Geneva Reports on the World Ec. This book was released on 2018-10-30 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the last decade, the developed world has been hit by the deepest recession since the Great Depression and a rollercoaster in commodity prices. And yet, core inflation has been both low and fairly stable. A rule of thumb that inflation is always near 2%, though more often than not just a bit below, has been quite reliable. The young, or those with short memories, could be forgiven for looking condescendingly at their older friends who speak of inflation as a major economic problem. But, like Galileo Galilei told his contemporaries who thought the Earth was immovable, "Eppur si muove" ("and yet it moves"). Since most societies regard stable inflation as a goal, it is tempting to describe this solid anchoring of inflation as a great achievement of monetary policy. But what if it was just luck? Will the great anchoring soon lead a great bout of inflation, just as the Great Moderation was followed by the Great Recession? Do we need to change the way in which policy is set to better handle changed circumstances since the financial crash? The 19th Geneva Report on the World Economy starts by analysing outcomes across countries for the last ten years. Inflation is compared with its behaviour in the period before the financial crash to assess the extent to which it really has been stable, what the proximate causes are, and whether it will stay low in future. The report then assesses theories of inflation in light of these facts, and tries to make sense of them. Next, the report turns to the question we posed at the start: was it good policy or good luck that prevented severe deflation and kept inflation relatively steady? A description of what policies were adopted and how they interacted with economic shocks informs the conclusions on appropriate policies--both monetary and fiscal--for the future. The report pays particular attention tothe role of central banks and the extent of their activities.
Download or read book Housing and the Financial Crisis written by Edward L. Glaeser and published by University of Chicago Press. This book was released on 2013-08-19 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Conventional wisdom held that housing prices couldn’t fall. But the spectacular boom and bust of the housing market during the first decade of the twenty-first century and millions of foreclosed homeowners have made it clear that housing is no different from any other asset in its ability to climb and crash. Housing and the Financial Crisis looks at what happened to prices and construction both during and after the housing boom in different parts of the American housing market, accounting for why certain areas experienced less volatility than others. It then examines the causes of the boom and bust, including the availability of credit, the perceived risk reduction due to the securitization of mortgages, and the increase in lending from foreign sources. Finally, it examines a range of policies that might address some of the sources of recent instability.
Download or read book End the Fed written by Ron Paul and published by Grand Central Publishing. This book was released on 2009-09-16 with total page 179 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the post-meltdown world, it is irresponsible, ineffective, and ultimately useless to have a serious economic debate without considering and challenging the role of the Federal Reserve. Most people think of the Fed as an indispensable institution without which the country's economy could not properly function. But in End the Fed, Ron Paul draws on American history, economics, and fascinating stories from his own long political life to argue that the Fed is both corrupt and unconstitutional. It is inflating currency today at nearly a Weimar or Zimbabwe level, a practice that threatens to put us into an inflationary depression where $100 bills are worthless. What most people don't realize is that the Fed -- created by the Morgans and Rockefellers at a private club off the coast of Georgia -- is actually working against their own personal interests. Congressman Paul's urgent appeal to all citizens and officials tells us where we went wrong and what we need to do fix America's economic policy for future generations.
Download or read book Monetary Policy Strategy written by Frederic S. Mishkin and published by MIT Press. This book was released on 2007 with total page 561 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book by a leading authority on monetary policy offers a unique view of the subject from the perspectives of both scholar and practitioner. Frederic Mishkin is not only an academic expert in the field but also a high-level policymaker. He is especially well positioned to discuss the changes in the conduct of monetary policy in recent years, in particular the turn to inflation targeting. Monetary Policy Strategydescribes his work over the last ten years, offering published papers, new introductory material, and a summing up, "Everything You Wanted to Know about Monetary Policy Strategy, But Were Afraid to Ask," which reflects on what we have learned about monetary policy over the last thirty years. Mishkin blends theory, econometric evidence, and extensive case studies of monetary policy in advanced and emerging market and transition economies. Throughout, his focus is on these key areas: the importance of price stability and a nominal anch fiscal and financial preconditions for achieving price stability; central bank independence as an additional precondition; central bank accountability; the rationale for inflation targeting; the optimal inflation target; central bank transparency and communication; and the role of asset prices in monetary policy.
Download or read book Stable Money written by Irving Fisher and published by . This book was released on 1934 with total page 476 pages. Available in PDF, EPUB and Kindle. Book excerpt: London edition (G. Allen & Unwin ltd.) has title: Stabilised money. "Selected bibliography (in addition to the 285 titles mentioned in the text [etc.])": pages 418-425.
Download or read book Israel and the World Economy written by Assaf Razin and published by MIT Press. This book was released on 2018-01-19 with total page 233 pages. Available in PDF, EPUB and Kindle. Book excerpt: A rigorous analysis of the role played by globalization in key episodes in the development of the Israeli economy, from hyperinflation crisis to high-tech surge. Anti-globalization sentiments are rising, especially in Europe and the United States, with the increasingly integrated global economy blamed for domestic economic distress. In this book, Assaf Razin argues that Israel offers a counterexample to this view, showing decisively positive economic effects of globalized finance, trade, and immigration. He offers a rigorous analysis of the role played by globalization in key episodes in the remarkable development of the Israeli economy. His findings may hold lessons for productivity-challenged advanced economies as well as for other countries such as China currently making the transition to fully developed economies. Razin examines the wave of immigration after the collapse of the Soviet Union, as highly skilled Soviet Jews migrated to Israel and the effect on income inequality; the Great Moderation of inflation and employment in advanced economies, as Israel's inflation converged in parallel with low world inflation rates; Israel's robustness in the face of the deflation shocks of the 2008 financial crisis; and technology transmission through foreign direct investment, reinforcing Israel's high-tech sector surge. He also considers such ongoing challenges as high fertility and low labor market participation and the economic costs of the Israeli-Palestinian conflict.
