The Global Economic Crisis

A Chronology

Larry Allen, John Rennie Short

• Publisher: Reaktion Books
• Year: 2013
• Print ISBN:
  9781780230924
• eBook ISBN:
  9781780231280
• Topic: Economics
• Subtopic: Business General
• Index: Economics

From Greece scrambling to meet Eurozone austerity measures to America’s sluggish job growth, there is every indication that the world has not recovered from the economic implosion of 2008. And for many of us, the details of what led to the recession – and why it has continued – remain murky. Economic historian Larry Allen enlightens us in The Global Economic Crisis, offering an insightful and nonpartisan chronology of events and their consequences and illuminating the interlocked economic processes that lay beneath the crisis. He describes and explains the changing nature of the global financial system, central bank policies, housing bubbles, deregulation, sovereign debt crises and more.

The timeline begins with the economic crisis in Japan in the late 1990s, asking whether Japan’s experience could be an indicator of the outcome of the recession and what it can teach us about managing a sluggish economy, before giving a comparative look at the economies of Brazil, China and India. Many elements have contributed to the ongoing crisis, including the introduction of the euro, the growth of new financial instruments such as securitization, collateralized debt obligations and credit default swaps, interest rate policies and the housing boom and subprime mortgage fiasco.

Lucid and informative, The Global Economic Crisis provides an impartial explanation to anyone seeking to understand the current state – and future – of the world’s economy.

REFERENCES

ONE Overview

1 Will Durant, The Story of Philosophy (Garden City, NY, 1927), p. 46.

2 Francis Bacon, The New Atlantis (Chicago, 1952), p. 207.

3 Francis Bacon, Essays (New York, 1942), p. 102.

4 Milton Friedman, “The Monetary Theory and Policy of Henry Simons,” in The Optimum Quantity of Money and Other Essays, (Chicago, 1969), pp. 81–93.

TWO Twilight of the Japanese Miracle

1 Arthur Link, ed., The Papers of Woodrow Wilson, vol. VI (Princeton, NJ, 1969), p. 168.

2 Masahiko Takeda and Philip Turner, “The Liberalization of Japan’s Financial Markets: Some Major Themes," Bank for International Settlements BIS Economic Papers, no. 34 (1992).

3 Ibid.

4 W. W. Rostow, The World Economy: History and Prospect (Austin, TX, 1978), p. 418.

5 Japan/U.S. Foreign Exchange Rate, www.economagic.com, accessed 6 November 2012.

6 Henry George, Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth, The Remedy (New York, 1935) p. 268.

7 Christopher Wood, “Enduring Myth,” Economist, CCCXVII/7684 (8 December 1990), pp. 9–15.

8 “Gently May do It”, Economist, CCCXVII/7679 (3 November 1990), pp. 19–21.

9 Kenichi Ohmae, “Business Forum: Tokyo’s Soaring Property Prices: If They Fall, So Will Our Stock Markets," New York Times (11 October 1987).

10 “Gently May do It,” Economist.

11 Robert L. Cutts, “Power from the Ground Up: Japan’s Land Bubble” Harvard Business Review, LXVIII/3(1990), pp. 164–72.

12 Ibid.

13 Elisabeth Bumiller, “The Japanese Art of Buying”, Washington Post (17 December 1989), p. A3.

14 Ibid.

15 “Demolition Time in Japan’s Property Market,” Economist, CCCXVII/7684 (8 December 1990), pp. 83–4.

16 “Gently May do It,” Economist.

17 “The Cracks Spread and Widen; The Euro Zone’s Debt Crisis,” Economist, CCCXCV/8680 (1 May 2010), p. 63.

18 G. Eisenstodt, “Wooosh!" Forbes, CXLVIII/14 (1991), pp. 113–14.

19 Statistics Bureau, Director-General for Policy Planning of Japan, Tokyo, www.stat.go.jp, accessed 7 November 2012.

20 Eisenstodt, “Wooosh!”

21 IMF, World Economic Outlook Database (October 2012), www.imf.org.

22 “Leaders: Back from the Dead; Japanese Banks,” Economist, CCCXCVIII/8722 (26 February 2011), p. 13.

23 IMF, World Economic Outlook Database (October 2012), www.imf.org.

24 Ibid.

THREE Financial Revolution

1 Sir Nicholas Goodison, “How London Can Remain on Top,” FT.com, Financial Times (26 October 2006), p. 1.

2 Joe Nocera, “Poking Holes in a Theory on Markets,” New York Times (5 June 2009), p. 1.

3 Pankaj Jain, “Financial Market Design and the Equity Premium: Electronic Versus Floor Trading,” Journal of Finance, LX/6 (2005), pp. 2,955–85.

4 “Five Years Since the Big Bang,” Economist, CCCXXI/7730 (26 October 1991), pp. 23–5.

5 Ibid.

6 Peter Truell and Matthew Winkler, “UK Set Today For ‘Big Bang’ Amid Questions: Rocky Start Seen as London Moves Toward Uniting Local, Foreign Markets,” Wall Street Journal (27 October 1986), p. 1.

7 James Sterngold, “The Big Bang that Never Was,” New York Times (16 May 1993), p. 1.

8 “Bang, Pop, or Sputter?” Economist, CCCXLVII/8067 (9 May 1998), special section, pp. 29–31.

9 “MS in Financial Engineering,” at http://ieor.columbia.edu, accessed 5 November 2012.

10 Bank of International Settlements, Semiannual OTC Statistics at end-December 2011 (September 2012), www.bis.org.

11 International Swaps and Derivatives Association, “ISDA Market Survey (Annual Only, PDF), 1987-present" www.isda.org/statistics, accessed 9 November 2012.

12 Nelson Schwartz and Julie Creswell, “Who Created this Monster?” New York Times (23 March 2008), p. 1.

13 Da...

Table of contents

• Front Cover
• Half Title
• Title Page
• Copyright
• Contents
• PREFACE
• ONE OVERVIEW
• TWO TWILIGHT OF THE JAPANESE MIRACLE
• THREE FINANCIAL REVOLUTION
• FOUR EUPHORIA IN THE HOUSING MARKET
• FIVE PERILS OF TAMING INFLATION
• SIX GLOBAL BANKING AND FINANCIAL CRISIS
• SEVEN THE REBIRTH OF KEYNESIAN ECONOMICS
• EIGHT CHINA AND INDIA KNOCK AT THE DOOR
• NINE COMMODITY PRICES TAKE FLIGHT
• TEN THE WEAKENING OF THE LABOR MARKET
• ELEVEN STRING OF SOVEREIGN DEBT JITTERS
• TWELVE THE LONG ROAD BACK
• REFERENCES
• BIBLIOGRAPHY
• ACKNOWLEDGMENTS
• INDEX