The current economic crisis has been assumed to reflect a cyclical problem, and some
economists have asked that it be dealt with 'fiscal stimulus packages', especially
packages associated with public spending. This action is similar to that of giving
steroids to a patient who suffers from a serious illness. It might make him or her feel
temporarily better, but it actually aggravates the illness.
Dollars, Euro's, and Debt suggests that an increase in public spending is the wrong
medicine, because it was precisely the increase in public spending that created some
of the structural problems that are now confused with, or have led to, the cyclical
slowdowns. The book argues that, over the years, and in a growing number of
countries, the high and increasing levels of public spending were, first and progressively,
being financed by higher tax levels and, subsequently, by increasing borrowing.
In the early years of the twenty-first century governments started facing strong
taxpayers' resistance to tax increases. Thus, they relied more and more on public
borrowing, pushing the public debts to high levels. More recently they started facing
stronger resistance by private lenders, that led to the progressive easing of monetary
conditions by central banks. The central banks' actions have made it difficult to
separate fiscal from monetary actions and have hidden some of the true deterioration
in the fiscal accounts. They have also increased future uncertainty and potential 'time
consistency' problems. The book evaluates the effects of 'fiscal stimulus packages',
especially when they start from precarious fiscal conditions, and presents a novel
'law of public expenditure growth', and suggests how that law may help in the design
of 'exit strategies' from the current crisis. It also discusses similarities and differences
between the monetary union that the euro and the monetary union that is the dollar.

The global financial and economic crisis has brought about many effects that are still difficult to interpret univocally. This book studies the consequences of the crisis on Europe by examining the effects on the European institutional setup, governance and architecture and by studying in detail the different member countries.

The book describes the birth and growth of financial institutions and stock exchanges in Scandinavia and Finland from 1656 to 2010, including their banking crises and the history of banking regulation. It argues that quantitative regulations cannot, in the long run, produce the desired results and bear the seeds of future financial crises.

There are already many papers and books on the causes and course of the current financial crisis, but this is the first and, for the moment, only such book to focus on the regulatory response to it. There are two main attributes that a bank needs to remain in business during a period of turmoil, liquidity to enable it to pay its debts when due, and capital, to absorb losses. Both have been insufficient. Charles Goodhart describes what went wrong and what needs to be done, alongside discussions of deposit insurance, credit rating agencies, prompt corrective action, etc. Charles Goodhart is the senior British economist specialising in financial stability issues. As the turmoil began, continued and exploded into crisis, he has kept up a series of commentaries, all since September 2007. These have been brought together, plus some new and additional material, to provide the reader with an overview of what went wrong in the regulatory framework for the financial system, and what now needs to be done to put that right. This will be required reading for financial regulators, practitioners in banking and finance, academics and students of finance, and those just wanting to know what went wrong and what to do now.

Researchers, policymakers and commentators have long debated the patterns through which adverse shocks in a few markets may quickly spread to a range of apparently disconnected financial markets causing widespread losses and turmoil. This book uses modern linear and non-linear econometric methods to characterize how shocks to the yield of risky fixed income securities, such as sub-prime asset-backed or low-credit rating sovereign bonds, are transmitted to the yields in other markets. These include equity and corporate bond markets as well as relatively risk-free fixed income securities, such as highly rated asset-backed securities and sovereign bonds from core Eurozone countries. The authors analyse and compare the results from linear and non-linear models to identify and assess four distinct contagion channels characterizing both US and European financial markets. These include the correlated information, risk premium, flight-to-liquidity, and flight-to quality channels. The results of this study support the theory that both investors and policy-makers ought to pay special attention to liquidity and commonalities in the perceptions of the probabilities of default, as channels through which financial shocks propagate.

The International Papers in Political Economy (IPPE) series explores the latest developments in political economy. This eighth volume focuses on the financial crisis currently gripping the eurozone, examining the root causes and outcomes and the uncertain future of the euro. The volume provides an overview of the crisis and its possible solutions, with a sharp focus on debt sustainability. Individual countries are also analysed in great depth, with four more detailed studies of the economic climate in Portugal, Ireland, Spain and Greece, exploring the implications of the crisis for economic policies of these countries.

This book presents an overview of the economics and politics implemented in the European Union and especially the Eurozone during the crisis of 2008-2012. Although it focuses on these four years, the analysis starts from the establishment of the European Union and covers the period up to the outbreak of the Cypriot banking crisis in mid-2013. The long-term creation of structural changes in European economics and politics is associated with a growth lag within the global economic environment dynamics. The economic and political consequences of the crisis and the development of new institutions will shape the future growth dynamics towards a Fragmented European Federation.

When the global financial crisis spread to Europe and its weak periphery through the banking sector, few contemplated that the real causes of the crisis did not reside only in the faulty architectures of globalisation and European integration but also in a pronounced power-shift to the 'global East'. The authors connect the 'local' with the 'global', and the 'local' with the 'European'. In this context, Fouskas and Dimoulas scrutinize the financial, geopolitical and historical underpinnings of the current Greek debt crisis that threatens not just the cohesion of the European Union, but the entire security architecture of the Euro-Atlantic world. By identifying the 'debt problem' as being one of the 'birthmarks' of Greece passed by the country's one hegemonic master onto another, they challenge the current half-truths about the contemporary debt crisis in Greece and the Euro-zone.

"The Economic Crisis and the State of Economics" brings together leading economists from a diverse set of backgrounds and presents their take on how economics can explain the current crisis but also how the crisis will affect economic thought.

Financial crises have plagued economies around the globe for centuries, yet no satisfactory policy solution has been found to significantly reduce the likelihood and severity of these devastating events. Macroprudential policy, the intellectual response to
financial crisis, may provide the solution to this recurrent problem. However, what this means in practice is subject to disagreement - with radicals proposing measures to stablise the flow of credit to households and companies, and others suggesting a more conservative approach focused on the banks. Macroprudential Policy is the first book to provide a coherent and comprehensive coverage of the issues of why, when and how policymakers should intervene.
Barwell brings his considerable experience of working in both a cenral bank and the financial sector to bear in examining the practical justification for the new regime, the institutions of macroprudential policy, the instruments at policymakers' disposal, and a discussion of how policymakers will go about discharging their responsibilities. The book also reviews the economic foundations of macroprudential policy. Conventional macroeconomics is based on assumptions that may work for the analysis of price stability and the conduct of monetary policy, but which more or less rules out the possibility of financial crises. This book introduces an alternative macroeconomics where crises can flourish, identifying the market failures which justify interventions to stabilize the system.

Risk and Hyperconnectivity brings together for the first time three paradigms: new risk theory, neoliberalization theory, and connectivity theory, to illuminate how the kaleidoscope of risk events in the opening years of the new century has recharged a neoliberal battlespace of media, economy, and security. Hoskins and Tulloch argue that hyperconnectivity is both a conduit of risk and a form of risk in itself, and that it alters the ways in which we experience events and remember them. Through interdisciplinary dialogue and case study analysis they offer original perspectives on the key questions of risk of our age, including: What is the path to a balance between individual privacy and state (or corporate) security? Is hyperconnectivity itself a new risk condition of our time? How do remembering and forgetting shape citizen insecurity and cultures of risk, and legitimize neoliberal governance? How do journalists operate as public intellectuals of risk? Through probing a series of risk events that have already scarred the twenty-first century, Hoskins and Tulloch show how both established and emergent media are central in shaping past, present and future horizons of neoliberalism, while also propelling wide pressure for its alternatives on those ranging from economics students worldwide to potential political leaders cultivated by austerity policies.

The banking and eurozone crises have triggered a new age of austerity during which customers will radically alter their buying behaviour. Many existing management theories are becoming inapplicable during the longest economic downturn since World War II. The last time the world faced such severe austerity was during the 1930s Great Depression. At that time the Austrian economist Joseph Schumpeter concluded that organizational survival demands exploitation of entrepreneurship and innovation. During the current economic downturn Western firms are facing increasingly intensive price competition from countries such as China. This volume uses research and real world case materials to prove that the future survival of Western organizations, through and beyond the current Great Recession, is dependent upon fully understanding the nature of current market change as a result of economic austerity and to exploit entrepreneurship, innovation and new technology in order to develop superior products and create new markets.

This book critically analyses the crisis of the euro currency from 2008 to the present. It argues that an understanding of this crisis requires an understanding of financial and economic crises in individual countries participating in the euro. It goes on to describe and explain the crises in four countries - Greece, Ireland, Spain and Italy - showing how they differ and together challenge the euro currency by requiring a varied policy response from Europe. Eurocritical is a guide for scholars, students and practitioners of finance and economics.

This meticulously documented work sets forth the major causes of the greatest asset bubble in world economic history-the American housing bubble, which began in 1940 and collapsed in 2007. In the aftermath of the American housing collapse in 2007, many ask why. The Great American Housing Bubble: The Road to Collapse asks a different and more fundamental question-how the bubble was created in the first place. To answer that question, it examines the causes, both political and economic, of the American housing bubble, created between 1940 and 2007. Those causes encompass everything from federal income tax subsidies for housing to local exclusionary policies, banking, accounting, real estate appraisal, and credit agency rating practices and policies. The book also takes into account the impact of greed, government regulation, speculation, and psychology-including blind faith in investment advisors-on the creation of the greatest asset bubble in the economic history of the world. The author takes a comparative historical approach, examining the current crisis in the light of notorious bubbles of the past. In the end, he concludes that the events precipitating the most recent collapse can be traced, at least in part, not to too little government regulation, but to too much. Extracts from major legislation-federal, state, and local-that promoted the creation of the housing bubble An introductory essay illuminating the broad features of Western capitalism and the financial and government institutions that have evolved to promote and regulate it, notably in the United States A detailed chronology orienting readers to the sequence and context of events A glossary of important financial and regulatory terms and terms used by those in the housing industry An appendix of governmental agencies and private institutions and think tanks involved in various aspects of the financial crisis A bibliography listing hundreds of sources, from articles and periodicals to books and treatises

This collection of essays by prominent economists and philosophers showcases the important contributions that markets can make to important topics within social economics, including practical issues such as poverty and disaster relief, as well as more general concerns regarding ethics and well-being.

There has been little analysis of the constitutional framework for management of the UK economy, either in constitutional law or regulatory studies. This is in contrast to many other countries where the concept of an 'economic constitution' is well established, as it is in the law of the European Union. Given the extensive role of the state in attempting to resolve recent financial crises in the UK and elsewhere in Europe, it is particularly important to develop such an analysis. This book sets out different meanings of an economic constitution, and applies them to key areas of economic management, including taxation and public borrowing, the management of public spending, (including the Spending Review), monetary policy, financial services regulation, industrial policy (including state shareholdings) and government contracting. It analyses the key institutions involved such as the Treasury and the Bank of England, also including a number of less well-known bodies such as the Office for Budget Responsibility. There is also coverage of the international context in which these institutions operate especially the European Union and the World Trade Organisation. It thus provides an account of the public law applying to economic management in the UK. This book also adopts a critical approach, assessing the degree to which there is coherence in the arrangements for economic management, the degree to which economic policy-making is constrained by constitutional norms, and the degree to which economic management is subject to deliberation and accountability through Parliament, the courts and other institutions.

Written for the motivated non-specialist, this work provides the most clear and thorough coverage available of the causes and consequences of the Great Financial Crisis and the role of the Federal Reserve in preventing it from escalating into a massive depression a la the 1930s. The Great Recession that followed the popping of the dual credit and housing bubbles deprived more than 8 million Americans of their jobs and triggered a per capita loss of income of more $6,000 in 2008 and 2009 alone. This work provides a clear and comprehensive explanation of the myriad forces that combined to create the bubbles that were the source of the economic contraction. It retraces the chain reaction that took place as these bubbles deflated. The channels through which the crisis spilled over to produce the Great Recession are carefully laid out. The book is unique in thoroughly contrasting the Federal Reserve's brilliant implementation of policies that saved us from disaster in the recent crisis with its inept behavior that strongly contributed to the Great Depression of the 1930s.

The book examines the problems that Nixon faced during his presidential term, focusing on economics but the role of politics is also highlighted. The convergence of the gold-dollar crises, oil crises and Watergate imbroglio posed a unique political and economic threat to global stability.

This book is a provocative examination of the idea of greed from various perspectives, drawing together experts from academia, politics and business. "Greed" explores whether the desire for material possession in post-industrial economies is a positive or a negative phenomenon and considers the implications of greed on society and the global economy.

In recent years, the effects of economic openness and technological change have fuelled dissatisfaction with established political systems and led to new forms of political populism that exploit the economic and political resentment created by globalization. This shift in politics was evident in the decision by UK voters to leave the European Union in June 2016, the November 2016 election of Donald Trump to the presidency of the United States, as well as the rise of populist movements on left and right throughout much of Europe. To many voters, the economy appears to be broken. Conventional politics is failing. Parties of the left and centre-left have struggled to forge a convincing response to this new phase of globalization in the aftermath of the 2008 crisis. This book examines the challenges that the new era of globalization poses for progressive parties and movements across the world. It brings together leading thinkers and experts including Andrew Gamble, Jeffry Frieden and Vivien Schmidt to debate the structural causes and political consequences of this new wave of globalization.

The global financial crisis has changed finance and the global economy forever. The debate over its causes and consequences has only just begun. This book brings together VoxEU.org columns written during the height of the storm from June to December 2008, offering a glimpse of history in the making through the eyes of some of the world's leading economists. To help place individual contributions within this historical sequence, an appendix updates the timeline of events from our June publication up to December 2008. Another appendix provides a glossary of technical terms. The columns are grouped under three headings: / How did the crisis spread around the world? / How has the crisis upended traditional thinking about financial economics? / How should we fix the economy and financial system?

This book examines the banking crisis of July/August 2007 and its ensuing after-effects in 2008-2009: economic crisis, credit crunch, massive recapitalization of some banks and nationalization of other banks. The author offers his views on the factors which led to this global financial catastrophe and how it could have been avoided.

Why do stock and housing markets sometimes experience amazing booms followed by massive busts and why is this happening more and more frequently? In order to answer these questions, William Quinn and John D. Turner take us on a riveting ride through the history of financial bubbles, visiting, among other places, Paris and London in 1720, Latin America in the 1820s, Melbourne in the 1880s, New York in the 1920s, Tokyo in the 1980s, Silicon Valley in the 1990s and Shanghai in the 2000s. As they do so, they help us understand why bubbles happen, and why some have catastrophic economic, social and political consequences whilst others have actually benefited society. They reveal that bubbles start when investors and speculators react to new technology or political initiatives, showing that our ability to predict future bubbles will ultimately come down to being able to predict these sparks.

A fascinating discussion of the role played by fear in financial market panics. Professor Read demonstrates, in easy-to-understand terms, that rising market fear portends to major financial declines. He explains the science and the economics of fear and shows that the financial market has learned how to capitalize on investor or economic fear

This book analyses and confronts the functioning of guarantee systems for SMEs in countries where these schemes had an important development. The book also highlights how the current financial crisis is modifying the guarantees schemes, through policy maker interventions.