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The financial crisis of 2008 was caused (mainly) by government interventions


  • Luboš Smrčka


The author analyses individual features of the current global economic development, coming up with a hypothesis that several independent factors, which would have occurred by themselves, too, combined at a given time and the concurrence thereof created a difficult and hardly predictable situation. Together with the commonly discussed causes of the economic crisis, he introduces a thesis that an important role was played by long-term and continuous attempts of governments in developed economies at outpacing the development of living standards in the respective countries in terms of the accessibility of own homes, at outpacing the trends predetermined by the abilities of the national economies. He comes up with the idea that particularly the massive support of housing in the United States led to creating an environment that ceased to behave market-wise and was not able to indicate correct and corresponding prices any longer, mainly because it artificially provoked demand for own homes. Moreover, homes in standards much higher than the mortgage lenders could afford economically.

Suggested Citation

  • Luboš Smrčka, 2009. "The financial crisis of 2008 was caused (mainly) by government interventions," Ekonomika a Management, University of Economics, Prague, vol. 2009(1).
  • Handle: RePEc:prg:jnleam:v:2009:y:2009:i:1:id:60

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    References listed on IDEAS

    1. Stanley, Marjorie T & Block, Stanley B, 1984. "A Survey of Multinational Capital Budgeting," The Financial Review, Eastern Finance Association, vol. 19(1), pages 36-54, March.
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    3. Klammer, Thomas, 1972. "Empirical Evidence of the Adoption of Sophisticated Capital Budgeting Techniques," The Journal of Business, University of Chicago Press, vol. 45(3), pages 387-397, July.
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    5. Schall, Lawrence D & Sundem, Gary L & Geijsbeek, William R, Jr, 1978. "Survey and Analysis of Capital Budgeting Methods," Journal of Finance, American Finance Association, vol. 33(1), pages 281-287, March.
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    9. Petry, Glenn H. & Sprow, James, 1993. "The theory and practice of finance in the 1990s," The Quarterly Review of Economics and Finance, Elsevier, vol. 33(4), pages 359-381.
    10. Giang Truong & Graham Partington & Maurice Peat, 2008. "Cost-of-Capital Estimation and Capital-Budgeting Practice in Australia," Australian Journal of Management, Australian School of Business, vol. 33(1), pages 95-121, June.
    11. Marie E Wicks Kelly & George C Philippatos, 1982. "Comparative Analysis of the Foreign Investment Evaluation Practices by U.S.-Based Manufacturing Multinational Companies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 13(3), pages 19-42, September.
    12. Brounen, D. & de Jong, A. & Koedijk, C.G., 2004. "Corporate Finance In Europe Confronting Theory With Practice," ERIM Report Series Research in Management ERS-2004-002-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
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    More about this item


    Ekonomická krize; Economic crisis; hypotéky; mortgages; vládní podpora bydlení; government housing subsidies;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General


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