Financial Crisis American Style
| Autor: | Aaron Flaaen, Barry Bosworth |
|---|---|
| Rok vydání: | 2009 |
| Předmět: |
Economics and Econometrics
media_common.quotation_subject Monetary policy Financial system Secondary market Interest rate Mark to model Political Science and International Relations Financial crisis Economics Asset (economics) Subprime mortgage crisis Financial market efficiency Finance media_common |
| Zdroj: | Asian Economic Papers. 8:146-170 |
| ISSN: | 1536-0083 1535-3516 |
| DOI: | 10.1162/asep.2009.8.3.146 |
| Popis: | This paper reviews some of the research on the causes of the financial crisis of 2008–09, highlights the key events that triggered a financial panic in September 2008, and summarizes the key policy actions that the United States has taken to ameliorate the crisis. We document the characteristics and growth of the sub-prime mortgage market, and the distorted incentives and flawed regulatory structure surrounding the secondary market for mortgage-backed securities. We also assess the role for macroeconomic determinants of the crisis that serve to explain the bubble in U.S. asset prices, most notably low global interest rates attributed to either loose monetary policy or excess global saving. Although low global interest rates may have contributed to the boom in housing markets and speculative excesses, we believe that the financial innovations and microeconomic distortions played a more fundamental role. Finally, a recovery marked by higher private saving, weak domestic investment, and a large public deficit appears to be unsustainable. Ultimately, the U.S. economy will need to shift about 3 percent of GDP from domestic consumption to the export sector. This will pose some serious challenges to Asian economies that have come to rely on exports to the U.S. market. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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