Search

Begin New Search Topic Financial Crisis Content Type Working Paper Publication Year within 25 Years

61. Three Myths Behind the Case for Grexit: A Destructive Analysis

Author:
Photis Lysandrou
Publication Date:
06-2015
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
Greece faces a stark choice: either to compromise on the terms laid down by its international creditors and thereby remain in the eurozone or reject any compromise on the terms and exit the eurozone. The Syriza government was elected in January, 2015, on the double promise that it would tear up the deeply unpopular memorandum imposed by the Troika while at the same keeping the euro. It was a promise that it could not keep. After several months of tough negotiations it has become clear that Greece's creditors, led by the German government, have no intention of accepting a renegotiated deal that substantively lightens Greece's debt burden and thus the need for the type of harsh austerity measures contained in the memorandum.
Topic:
Debt, Economics, Government, and Financial Crisis
Political Geography:
Europe and Greece

62. Learning, Expectations, and the Financial Instability Hypothesis

Author:
Martin Guzman and Peter Howitt
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper analyzes what assumptions on formation of expectations are consistent with Minsky’s Financial Instability Hypothesis (FIH) and its corollaries. The FIH establishes that financial relations evolve over time turning a stable system into an unstable one. Financial crises would be more likely to occur, and more severe if they occur, the longer the previous crisis recedes into the past. We show that the hypothesis is consistent with assumptions on formation of expectations that imply learning from realization of states and inconsistent with the assumption of full information rational expectations.
Topic:
Financial Crisis, Finance, Economic Theory, and Instability
Political Geography:
Global Focus

63. Too much saving... or too few financing channels?

Author:
Anton Brender and Florence Pisani
Publication Date:
04-2015
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The global financial crisis led to widespread dislocation. Understanding the forces that led to such a crisis is no easy matter. After briefly looking back at the mechanics underlying the recent episode of international transfers of saving, this paper looks at how the resulting global imbalances started to unwind and why helping promote the building of new financing channels should now be governments’ priority.
Topic:
Government, Financial Crisis, Global Financial Crisis, and Saving
Political Geography:
Global Focus

64. The Federal Reserve Engages the World (1970–2000): An Insider's Narrative of the Transition to Managed Floating and Financial Turbulence

Author:
Edwin M. Truman
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper traces the evolution of the Federal Reserve and its engagement with the global economy over the last three decades of the 20th century: 1970 to 2000. The paper examines the Federal Reserve's role in international economic and financial policy and analysis covering four areas: the emergence and taming of the great inflation, developments in US external accounts, foreign exchange analysis and activities, and external financial crises. It concludes that during this period the US central bank emerged to become the closest the world has to a global central bank.
Topic:
Economics, Foreign Exchange, and Financial Crisis
Political Geography:
United States

65. Versailles Redux? Eurozone Competitiveness in a Dynamic Balassa-Samuelson-Penn Framework

Author:
Arvind Subramanian and Kevin Stahler
Publication Date:
11-2014
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Prima facie, competitiveness adjustments in the eurozone, based on unit labor cost developments, appear sensible and in line with what the economic analyst might have predicted and the economic doctor might have ordered. But a broader and arguably better—Balassa-Samuelson-Penn (BSP)—framework for analyzing these adjustments paints a very different picture. Taking advantage of the newly released PPP-based estimates of the International Comparison Program (2011), we identify a causal BSP relationship. We apply this framework to computing more appropriate measures of real competitiveness changes in Europe and other advanced economies in the aftermath of the recent global crises. There has been a deterioration, not improvement, in competitiveness in the periphery countries between 2007 and 2013. Second, the pattern of adjustment within the eurozone has been dramatically perverse, with Germany having improved competitiveness by 9 percent and with Greece's having deteriorated by 9 percent. Third, real competitiveness changes are strongly correlated with nominal exchange rate changes, which suggests the importance of having a flexible (and preferably independent) currency for effecting external adjustments. Fourth, internal devaluation—defined as real competitiveness improvements in excess of nominal exchange rate changes—is possible but seems limited in scope and magnitude. Our results are robust to adjusting the BSP framework to take account of the special circumstances of countries experiencing unemployment. Even if we ignore the BSP effect, the broad pattern of limited and lopsided adjustment in the eurozone remains.
Topic:
Economics, Industrial Policy, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:
Europe

66. The Role of Mortgage Finance in Financial (In)Stability

Author:
Mark A. Calabria
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Empirical research on the causes of financial crises has grown in recent decades. Early work, such as that by Kaminsky and Reinhart, helped establish the link between asset prices and banking crises. While this initial research focused on equity prices, subsequent research expanded the analysis to include residential property prices. This subsequent research is briefly reviewed here. After establishing the link between residential property prices and banking crises, I discuss the role of various credit policies, both for their impact on property prices and for the stability of the financial system in the face of declining property prices. The role of specific loan characteristics, such as loan-to-value (LTV), will be discussed first, followed by the role of institutional leverage. Policy recommendations conclude.
Topic:
Debt, Global Recession, Financial Crisis, and Governance

67. Understanding Differences in Growth Performance in Latin America and Developing Countries between the Asian and Global Financial Crises

Author:
Roberto Alvarez and José De Gregorio
Publication Date:
11-2014
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Latin American performance during the global fi nancial crisis was unprecedented. Many developing and emerging countries successfully weathered the worst crisis since the Great Depression. Was it good luck? Was it good policies? In this paper we compare growth during the Asian and global fi nancial crises and fi nd that a looser monetary policy played an important role in mitigating crisis. We also fi nd that higher private credit, more fi nancial openness, less trade openness, and greater exchange rate intervention worsened economic performance. Our analysis of Latin American countries confi rms that eff ective macroeconomic management was key to good economic performance. Finally, we present evidence from a sample of 31 emerging markets that high terms of trade had a positive impact on resilience.
Topic:
Economics, Global Recession, Monetary Policy, and Financial Crisis
Political Geography:
Asia and Latin America

68. Strategy and Force Planning in a Time of Austerity

Author:
Michael J. Meese
Publication Date:
05-2014
Content Type:
Working Paper
Abstract:
On February 13, 1989, General Colin Powell, who was in a transition between National Security Advisor and Commander of U.S. Army Forces Command, addressed the reality of strategy: “All of the sophisticated talk about grand strategy is helpful, but show me your budgets and I will tell you what your strategy is.”1 What General Powell meant is that the definition of the U.S. role in the world and its strategic goals flow from budgets, not the other way around. This paper fleshes out General Powell's observation by focusing on the means part of the ends, ways, and means of strategy in order to explain how austerity affects force planning and strategy. By first examining budget reductions as a general matter, the paper describes today's austere U.S. budgetary environment. It concludes with the current strategic options that will likely characterize the contemporary discussion of strategy and force planning.
Topic:
Defense Policy, Financial Crisis, and Budget
Political Geography:
United States

69. Comments on the September 29, 2014 FSB Consultative Document, "Cross-Border Recognition of Resolution Action"

Author:
Steven L. Schwarcz
Publication Date:
11-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The International Law Research Program (ILRP) of the Centre for International Governance Innovation (CIGI) welcomes the opportunity to comment on the Financial Stability Board's (FSB's) Consultative Document, “Cross-Border Recognition of Resolution Action” (hereafter referred to as the “Consultative Document”) that was released on September 29, 2014.
Topic:
International Trade and Finance, Financial Crisis, and Reform

70. China in the G20 Summitry: Review and Decision-making Process

Author:
Alex He
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
As the largest emerging economy, China believes that the Group of Twenty (G20), instead of the Group of Eight (G8), is the ideal platform for its participation in global governance. This paper examines the reasons why China joined the G20 rather than the G8, and then focuses on a detailed review of China's participation in G20 summits since the enhanced forum began in 2008. China took a very active and cooperative attitude in dealing with the global financial crisis in 2008-2009. The paper observes that China also insisted on its own agenda for reforms to the international monetary system, through reforms to the international financial institutions that manage it — in particular, raising the number of voting shares and the representation of developing countries at the IMF and the World Bank. Based on the reviews of China's performance in the G20 summits since 2008, the paper explores China's policy making through its participation in the G20, determining that it is shaped by several major economic departments in addition to the Ministry of Foreign Affairs, and coordinated by a vice premier responsible for economic and financial affairs. The paper concludes that China has gained immensely from its participation in the G20. Most importantly, China entered the centre stage of global economic governance through the G20, which allowed the country to demonstrate that it is a responsible great power, and communicate and maintain relations with other major powers. The main challenges China has faced since joining the G20, from the perspective of some Chinese scholars, are a lack of capacity for agenda setting and shaping initiatives, as well as inadequate communication and coordination among different government departments and between the Sherpa and financial tracks of the G20.
Topic:
Economics, International Political Economy, International Trade and Finance, International Monetary Fund, Global Recession, Financial Crisis, and World Bank
Political Geography:
China

71. Reforming the Global Architecture of Financial Regulation: The G20, the IMF and the FSB

Author:
Malcolm D. Knight
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The global financial crisis that began in 2007 and deepened in 2008 exposed major weaknesses in financial and macroeconomic policy coordination, and profound flaws in financial risk management and regulation in a number of advanced countries. The severity of the crisis led global leaders to recognize that they must find a way to reform the global regulatory architecture to ensure that the financial system can absorb shocks while continuing to function efficiently.
Topic:
International Trade and Finance, Markets, International Monetary Fund, Financial Crisis, and Reform
Political Geography:
United States, United Kingdom, and Europe

72. European Banking Union: An Immediate Tool for Euro Crisis Management and a Long-Term Project for the Single Market

Author:
Giulia Rosa Maria Cavallo
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
After the adoption of a single monetary policy which commits the European Central Bank to maintaining the euro's purchasing power and price stability in the Eurozone, the European Union is facing a new, but equally fundamental challenge: the implementation in a relatively short time of the so-called "Banking Union". Its purpose is twofold: (1) breaking the link between banking and sovereign risk, with the ultimate goal of achieving full protection of EU savers in the event of a crisis; and (2) ensuring uniformity of credit conditions - which are still too fragmented - within the European banking market, to ensure greater EU integration of the financial system. Starting from the Communication in which the European Commission stressed the need for a banking union, this paper intends to explore the complex process towards its establishment by looking at the EU institutional mechanisms and the legal aspects. In particular, the analysis will be based on two building blocks: (1) the Single Supervisory Mechanism, with a single supervisor at the heart of the banking union; and (2) the Single Resolution Mechanism as a new integrated resolution framework and a resolution fund to address the failure of banking institutions. The paper then assesses the next steps for a fully fledged banking union, necessary in order for this new instrument to lay the foundations for a genuine Economic and Monetary Union, thereby fostering financial and economic stability in the euro area and in the EU as a whole.
Topic:
Economics, Markets, Monetary Policy, and Financial Crisis
Political Geography:
Europe

73. Exports and Capacity Constraints: A smooth transition regression model for six euro-area countries

Author:
Ansgar Belke, Anne Oeking, and Ralph Setzer
Publication Date:
05-2014
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The significant gains in export market shares made in a number of vulnerable euro-area crisis countries have not been accompanied by an appropriate improvement in price competitiveness. This paper argues that, under certain conditions, firms consider export activity as a substitute for serving domestic demand. The strength of the link between domestic demand and exports is dependent on capacity constraints. Our econometric model for six euro-area countries suggests domestic demand pressure and capacity-constraint restrictions as additional variables of a properly specified export equation. As an innovation to the literature, we assess the empirical significance through the logistic and the exponential variant of the non-linear smooth transition regression model. We find that domestic demand developments are relevant for the short-run dynamics of exports in particular during more extreme stages of the business cycle. A strong substitutive relationship between domestic and foreign sales can most clearly be found for Spain, Portugal and Italy, providing evidence of the importance of sunk costs and hysteresis in international trade.
Topic:
Economics, Human Rights, International Trade and Finance, and Financial Crisis
Political Geography:
Europe

74. Development: Advancement through International Organizations

Author:
Rohinton Medhora and David Malone
Publication Date:
05-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
The familiar world of international organizations principally devoted to development has been upended by two phenomena. First is the emergence of sustained economic success in the developing world (mostly in Asia, but increasingly also in Africa and, in a less spectacular way, Latin America) amid compelling, continuing need among the world's poor. Second, the slow-moving, serious financial and economic crisis of the industrialized world since 2008 has reordered priorities in many of their capitals toward domestic spending and away from costly international projects.
Topic:
Development, Economics, International Cooperation, International Organization, and Financial Crisis
Political Geography:
Africa, Asia, United Nations, and Latin America

75. Sovereign Debt Restructuring: Old Debates, New Challenges

Author:
James A. Haley
Publication Date:
05-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Ten years ago, in the wake of the Asian financial crisis and subsequent Argentine default, the international community debated how to best promote the timely, effective restructuring of sovereign debt. The debate then focused largely on the relative merits of a so-called statutory approach for sovereign restructurings, with features of domestic bankruptcy regimes, versus the voluntary use of contractual terms designed to facilitate restructurings. At the time, the statutory approach did not have the support necessary to move from proposal to policy and efforts to improve the framework of sovereign debt restructuring rested on the contractual approach.
Topic:
Economics, International Trade and Finance, and Financial Crisis
Political Geography:
Asia

76. ECB Policy and Eurozone Fragility: Was De Grauwe Right?

Author:
Ana-Maria Fuertes, Elena Kalotychou, and Orkun Saka
Publication Date:
06-2014
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Paul De Grauwe ' s fragility hypothesis states that member countries of a monetary union such as the eurozone are highly vulnerable to a self – fulfilling mechanism by which the efforts of investors to avoid losses from default can end up triggering the very default they fear. The authors test this hypothesis by applying an eclectic methodology to a time window around Mario Draghi ' s " whatever it takes " (to keep the eurozone on firm footing) pledge on 26 July 2012 . This pledge was soon followed by the announcement of the Outright Monetary Transactions (OMT) program me (the prospective and conditional purchase by the European Central Bank of sovereign bonds of eurozone countries having difficulty issuing debt) . The principal components of eurozone credit default swap spreads validate this choice of time frame . An event study reveals significant pre – announcement contagion emanating from Spain to Italy, Belgium, France and Austria. Furthermore, time – series regression confirms frequent clusters of large shocks affecting the credit default swap spreads of the four eurozone countries but solely during the pre – announcement period. The findings of this report support the fragility hypothesis for the eurozone and endorse the Outright Monetary Transactions programme.
Topic:
Economics, Foreign Exchange, International Trade and Finance, and Financial Crisis
Political Geography:
Europe, France, Belgium, and Italy

77. The Urban Regeneration Experience of The United Kingdom: Lessons for Turkey

Author:
Fatih Eren
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
Centre for Strategic Research and Analysis (CESRAN)
Abstract:
The United Kingdom (UK) is the most experienced country regarding the theories, policies, strategies and practices of urban regenerations in the world. This study firstly outlines UK’s urban regeneration experience and then discusses how Turkey can benefit from this experience in the best way. The global financial crisis emerged in 2008 forced the UK to go a change in its national urban regeneration policy. Therefore, this paper has been divided into two parts as UK’s urban regeneration policy before and after 2010.
Topic:
Economics, International Cooperation, Financial Crisis, and Urban
Political Geography:
United Kingdom, Europe, Turkey, and Asia

78. Why Puerto Rico's Economy Matters for U.S. Security

Author:
Jose J. Villamil
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
Center for Strategic and International Studies
Abstract:
Puerto Rico's economic situation circa 1950 was vastly different than today's. In the 1940s through the first half of the 60s, the island experienced a sustained boom, with annual growth rates on the order of 7 percent; the island was hailed as a model for developing countries. It instituted major reforms in government, economic and social programs, and the health sector. Puerto Rico, in coordination with the U.S. federal government, hosted thousands of observers from around the world who came to Puerto Rico to learn about its successful development model.
Topic:
Crime, Economics, Narcotics Trafficking, and Financial Crisis
Political Geography:
United States

79. Reforming India's Financial System

Author:
Ila Patnaik and Ajay Shah
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
India's financial system has long been inadequate. With an economy worth $2 trillion, the country's financial flaws are increasingly serious and outright dangerous. But fundamental change is under way. The government-backed Financial Sector Legislative Reforms Commission drafted the Indian Financial Code (IFC), a single unified law that replaces most existing financial law in India and is an important milestone in the development of state capacity. Now the government must work to adopt and implement the full code.
Topic:
Economics, Monetary Policy, Financial Crisis, and Reform
Political Geography:
South Asia and India

80. Reforming Finance: Macro and Micro Perspectives

Author:
Pierre Siklos
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
Reforms of the financial system in the wake of the global financial crisis are incomplete. Beyond reforms, good judgment is essential in a crisis. Short-termism in finance cannot be completely controlled by regulation and supervision. Financial crises are inevitable but need not be as virulent at the global financial crisis. Central banks will have to rethink their policies and how they interact with other agencies partially responsible for maintaining financial system stability.
Topic:
Economics, Globalization, International Trade and Finance, Financial Crisis, Governance, and Reform
Political Geography:
Europe