Asset Bubbles, Debt Deflation, and Global Imbalances
The article investigates the primary imbalances in our global economy, which have brought us to the brink of depression. Putting the emphasis on structural changes in our credit system following its deregulation in the 1980s, we can conclude that the confluence of financial innovation and financial globalization created a new propensity for speculative asset bubbles. When the latest bubble burst in 2007, it triggered a devastating sequence of financial instability which has driven the world economy into the worst downturn since the 1930s. Government crisis-management responses, from deficit spending to unorthodox monetary policy and bank rescues, are assessed. The global dimension of this crisis requires international policy coordination, a task made more difficult by the asymmetry of our dollar-based international monetary system encouraging excessive US deficits.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 38 (2009)
Issue (Month): 2 (July)
|Contact details of provider:|| Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=110909|
When requesting a correction, please mention this item's handle: RePEc:mes:ijpoec:v:38:y:2009:i:2:p:46-69. See general 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: (Chris Nguyen)
If references are entirely missing, you can add them using this form.