consequences - ucsc.edu) and Media Services
... ICT Networks Compress time/space 24/7 trading, computer programs, hedge funds, derivatives, “subprime CDOs” CDFs Solutions: Global Central Bank: Keynes, Soros, Stiglitz Nov 15th ...
... ICT Networks Compress time/space 24/7 trading, computer programs, hedge funds, derivatives, “subprime CDOs” CDFs Solutions: Global Central Bank: Keynes, Soros, Stiglitz Nov 15th ...
Leveraged Bubbles
... [O]ver-investment and over-speculation are often important; but they would have far less serious results were they not conducted with borrowed money. – Irving Fisher, “The Debt-Deflation Theory of Great Depressions,” 1933 All of us knew there was a bubble. But a bubble in and of itself doesn’t give ...
... [O]ver-investment and over-speculation are often important; but they would have far less serious results were they not conducted with borrowed money. – Irving Fisher, “The Debt-Deflation Theory of Great Depressions,” 1933 All of us knew there was a bubble. But a bubble in and of itself doesn’t give ...
The Global Financial Crisis: A Re
... operating in specific markets. Most of the time, they are well linked through arbitrage. However, when some investors withdraw (because of losses in other activities, cuts in access to funds, or internal agency issues) the effect on prices can be very large. When this happens, rates are no longer li ...
... operating in specific markets. Most of the time, they are well linked through arbitrage. However, when some investors withdraw (because of losses in other activities, cuts in access to funds, or internal agency issues) the effect on prices can be very large. When this happens, rates are no longer li ...
Crisis, Contagion, and the Need for a New Paradigm
... – On the other hand, if lending all goes through a sufficiently well capitalized clearing house (a bank), then a default by one borrower is not as likely to lead to a cascade – But a very large shock which leads to the bankruptcy of the “clearing house” can have severe systemic effects ...
... – On the other hand, if lending all goes through a sufficiently well capitalized clearing house (a bank), then a default by one borrower is not as likely to lead to a cascade – But a very large shock which leads to the bankruptcy of the “clearing house” can have severe systemic effects ...
Leveraged Bubbles
... the near universe of advanced economies in the era of modern economic growth and finance capitalism over the last 150 years. Financial crises and asset price boom-busts are relatively rare events. Thus, any empirical study must employ very long time series and the historical experience of more than ...
... the near universe of advanced economies in the era of modern economic growth and finance capitalism over the last 150 years. Financial crises and asset price boom-busts are relatively rare events. Thus, any empirical study must employ very long time series and the historical experience of more than ...
Ancients/Mercantilists/Physiocrats
... • Money flows from villages to market towns …to capital Prices are higher where money is more plentiful ...
... • Money flows from villages to market towns …to capital Prices are higher where money is more plentiful ...
Looking into the crystal ball: a forecast and some risks... the year ahead Introduction
... in the Asian region has been strong but has brought its own difficulties with inflation and asset price bubbles building. The outlook for Western and developed economies is still spongy as these economies slowly recover from the aftershocks of repairing damaged bank balance sheets and ...
... in the Asian region has been strong but has brought its own difficulties with inflation and asset price bubbles building. The outlook for Western and developed economies is still spongy as these economies slowly recover from the aftershocks of repairing damaged bank balance sheets and ...
Asset Prices, Financial Stability and Monetary Policy
... interest rates as justifying a world wide increase in housing prices. This point was emphasized in the IMF’s April 2008 World Economic Outlook, which indentified declining real interest rates as a major driver of global house price increases during the 2000s. Of course, not only did interest rates ...
... interest rates as justifying a world wide increase in housing prices. This point was emphasized in the IMF’s April 2008 World Economic Outlook, which indentified declining real interest rates as a major driver of global house price increases during the 2000s. Of course, not only did interest rates ...
Optimal investment in current asset is part of the
... Optimal investment in current asset is part of the working capital management policy within an organization. Gross working capital is the investment in current assets while net working capital is current assets less current liabilities. An effective working capital management requires right amount o ...
... Optimal investment in current asset is part of the working capital management policy within an organization. Gross working capital is the investment in current assets while net working capital is current assets less current liabilities. An effective working capital management requires right amount o ...
The Economics of Housing Bubbles
... confidence, go into despair and lose confidence in their decision making. In fact, they lose confidence in the “system,” which means they lose confidence in capitalism and become susceptible to new political “reforms” that offer structure and security in exchange for some of their autonomy and free ...
... confidence, go into despair and lose confidence in their decision making. In fact, they lose confidence in the “system,” which means they lose confidence in capitalism and become susceptible to new political “reforms” that offer structure and security in exchange for some of their autonomy and free ...
Intangible assets
... but an active market must be available for the intangible. IAS 38 distinguishes between research and development ...
... but an active market must be available for the intangible. IAS 38 distinguishes between research and development ...
In Search Of The Reasons Of The Great Recession : Time For A Change In Policies?:
... The most recent global recession during the period of 2007-2009, which has been termed as the ―Great Recession‖, has now almost come to an end. But questions concerning the causes of this recession are starting to arise. Some economists, including Stanford economist and former Reagan adviser John Ta ...
... The most recent global recession during the period of 2007-2009, which has been termed as the ―Great Recession‖, has now almost come to an end. But questions concerning the causes of this recession are starting to arise. Some economists, including Stanford economist and former Reagan adviser John Ta ...
Pre crisis monetary policy thinking
... output gap, which turns out to be the best possible outcome for activity given the imperfections present in the economy. This “divine coincidence” implied that, even if policymakers cared about activity, the best they could do was to maintain stable inflation. There was also consensus that inflation ...
... output gap, which turns out to be the best possible outcome for activity given the imperfections present in the economy. This “divine coincidence” implied that, even if policymakers cared about activity, the best they could do was to maintain stable inflation. There was also consensus that inflation ...
Is Milton Friedman a Keynesian?
... wholly) a monetary phenomenon, is determined by the supply of phenomenon, is determined by the supply of and demand for and demand for money. loanable funds, a market which faithfully reflects actual opportunities and constraints in the investment sector. K2. In the Keynesian vision, a change in the ...
... wholly) a monetary phenomenon, is determined by the supply of phenomenon, is determined by the supply of and demand for and demand for money. loanable funds, a market which faithfully reflects actual opportunities and constraints in the investment sector. K2. In the Keynesian vision, a change in the ...
Chapter One: Asset Markets and Asset Prices
... Q: What are the forces determining market prices of different assets? Assume many investors with initial wealth, each is a price taker. Select portfolio according to the decision rule: number of assets to hold as a function of observed prices and initial wealth. Market equilibrium is defined b ...
... Q: What are the forces determining market prices of different assets? Assume many investors with initial wealth, each is a price taker. Select portfolio according to the decision rule: number of assets to hold as a function of observed prices and initial wealth. Market equilibrium is defined b ...
Chapter 7
... • Reserve requirement: Increasing (decreasing) required percentage reduces (raises) amount of money supported by given reserve base. • Open market operations: Fed purchases (sales) of government securities increase (decrease) bank deposits available to support money supply. • Discount loans: Increas ...
... • Reserve requirement: Increasing (decreasing) required percentage reduces (raises) amount of money supported by given reserve base. • Open market operations: Fed purchases (sales) of government securities increase (decrease) bank deposits available to support money supply. • Discount loans: Increas ...
Bubbles and Crises - University of Pennsylvania
... by the default of many ®rms and other agents that have borrowed to buy assets at in¯ated prices. Banking and/or foreign exchange crises may follow this wave of defaults. The dif®culties associated with the defaults and banking and foreign exchange crises often cause problems in the real sector of th ...
... by the default of many ®rms and other agents that have borrowed to buy assets at in¯ated prices. Banking and/or foreign exchange crises may follow this wave of defaults. The dif®culties associated with the defaults and banking and foreign exchange crises often cause problems in the real sector of th ...
Regime change: Implications of macroeconomic shifts
... break down. The term we use to describe relationships that change character beyond certain thresholds is “non-linear.” In non-linear relationships, two variables may be positively correlated under one set of conditions, but show a lower or even negative correlation under different conditions. ...
... break down. The term we use to describe relationships that change character beyond certain thresholds is “non-linear.” In non-linear relationships, two variables may be positively correlated under one set of conditions, but show a lower or even negative correlation under different conditions. ...
practical guide to economic concepts and theories
... This 206-page guide contains 230 sections that cover some 500 economic notions organized in a logical order. It covers microeconomics, macroeconomics, international economics and finance, public economics, market finance and statistical concepts regularly used in economic analyses. From the law of s ...
... This 206-page guide contains 230 sections that cover some 500 economic notions organized in a logical order. It covers microeconomics, macroeconomics, international economics and finance, public economics, market finance and statistical concepts regularly used in economic analyses. From the law of s ...
What is deflation? A continual decline in the average price level of
... GDP: total value of goods/services produced within a country’s physical borders, GNP: included those also produced outside the physical borders ...
... GDP: total value of goods/services produced within a country’s physical borders, GNP: included those also produced outside the physical borders ...
The Financialization of Commodity Futures Markets Christopher L. Gilbert
... return, its price can be away from equilibrium. With a positive return, an asset price which is too high will become increasingly out of line with the fundamental but will nevertheless generate the required return. • In the end, reality catches up through supply-demand adjustment. In commodities, in ...
... return, its price can be away from equilibrium. With a positive return, an asset price which is too high will become increasingly out of line with the fundamental but will nevertheless generate the required return. • In the end, reality catches up through supply-demand adjustment. In commodities, in ...
Powerpoint Presentation
... instead of letting prices adjust Fed chair Greenspan lowered the federal funds rate to 2%, then 1%. Now that the housing bubble is bursting, instead of letting prices adjust Fed chair Bernanke has lowered the federal funds rate to near zero. ...
... instead of letting prices adjust Fed chair Greenspan lowered the federal funds rate to 2%, then 1%. Now that the housing bubble is bursting, instead of letting prices adjust Fed chair Bernanke has lowered the federal funds rate to near zero. ...
Chpt 5
... lead people to expect a higher price level in the future. Copyright © 2007 Pearson Addison-Wesley. All rights reserved. ...
... lead people to expect a higher price level in the future. Copyright © 2007 Pearson Addison-Wesley. All rights reserved. ...
Economic bubble
An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is trade in an asset at a price or price range that strongly deviates from the corresponding asset's intrinsic value. It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect, when a sudden drop in prices appears. Such a drop is known as a crash or a bubble burst. Both the boom and the burst phases of the bubble are examples of a positive feedback mechanism, in contrast to the negative feedback mechanism that determines the equilibrium price under normal market circumstances. Prices in an economic bubble can fluctuate erratically, and become impossible to predict from supply and demand alone.While some economists deny that bubbles occur, the cause of bubbles remains disputed by those who are convinced that asset prices often deviate strongly from intrinsic values. Many explanations have been suggested, and research has recently shown that bubbles may appear even without uncertainty, speculation, or bounded rationality. In such cases, the bubbles may be argued to be rational, where investors at every point fully compensated for the possibility that the bubble might collapse by higher returns. These approaches require that the timing of the bubble collapse can only be forecast probabilistically and the bubble process is often modelled using a Markov switching model. It has also been suggested that bubbles might ultimately be caused by processes of price coordination or emerging social norms.