WP 2009-10 After Hubris, Smoke and Mirrors, The Downward Spiral: Financial and real markets pull each other down; how can policy reverse this?
AbstractThe causes of the present crisis are largely to be found in the unregulated development of new financial products and in the over-expansion of the financial sector, in particular the shadow banking sector, which emerged precisely to avoid regulation. These changes led to lower risk perception, overvaluing of assets, overleveraging, and then to higher actual risk and instability. But the development of this instability, bringing on a crash, has also led to a collapse of the real side of the economy. The authors discuss the new financial arrangements and new types of regulation that are needed to prevent this happening again
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Schwartz Center for Economic Policy Analysis (SCEPA), The New School in its series SCEPA Working Papers with number 2009-10.
Length: 42 pages
Date of creation: May 2009
Date of revision:
financial crisis; real estate bubble; recession;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-03 (All new papers)
- NEP-FDG-2009-07-03 (Financial Development & Growth)
- NEP-PKE-2009-07-03 (Post Keynesian Economics)
- NEP-URE-2009-07-03 (Urban & Real Estate Economics)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bridget Fisher).
If references are entirely missing, you can add them using this form.