IDEAS home Printed from https://ideas.repec.org/p/iae/iaewps/wp2008n25.html
   My bibliography  Save this paper

The World Credit Crisis: Understanding It, and What To Do

Author

Listed:
  • W. Max Corden

    (Department of Economics, The University of Melbourne)

Abstract

This paper expounds a story in four stages to explain the world credit crisis, namely: (1) too much credit - an international perspective, (2) too much risk - reaction to low real interest rate, (3) the fatal flaw - the new complex financial instruments, and (4) the panic- bank lending dries up. The paper also discusses the relationship of this crisis to the often-expected crisis of the global imbalances, and it outlines various policy implications.

Suggested Citation

  • W. Max Corden, 2008. "The World Credit Crisis: Understanding It, and What To Do," Melbourne Institute Working Paper Series wp2008n25, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2008n25
    as

    Download full text from publisher

    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2008n25.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. James Tobin, 1996. "Full Employment and Growth," Books, Edward Elgar Publishing, number 800.
    2. W. Max Corden, 2007. "Those Current Account Imbalances: A Sceptical View1," The World Economy, Wiley Blackwell, vol. 30(3), pages 363-382, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mejra Festić, 2011. "The role of the foreign banks in the 5 EU member states," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 13(1), pages 189-206, June.
    2. Pomfret, Richard, 2010. "The financial sector and the future of capitalism," Economic Systems, Elsevier, vol. 34(1), pages 22-37, March.
    3. Richard Pomfret, 2009. "The Post‐2007 Financial Crisis and Policy Challenges facing Australia," Economic Papers, The Economic Society of Australia, vol. 28(3), pages 255-263, September.
    4. Prema‐chandra Athukorala & Hal Hill & Sisira Jayasuriya, 2021. "Economist as public intellectual: Max Corden’s journey through life," The World Economy, Wiley Blackwell, vol. 44(6), pages 1472-1483, June.
    5. Jonathan E. Ogbuabor & Anthony Orji & Gladys C. Aneke & Manasseh O. Charles, 2019. "Did the global financial crisis alter the oil–gasoline price relationship?," Empirical Economics, Springer, vol. 57(4), pages 1171-1200, October.
    6. Rossana Merola & Douglas Sutherland, 2012. "Fiscal Consolidation: Part 3. Long-Run Projections and Fiscal Gap Calculations," OECD Economics Department Working Papers 934, OECD Publishing.
    7. Ian M. McDonald, 2009. "The Global Financial Crisis and Behavioural Economics," Economic Papers, The Economic Society of Australia, vol. 28(3), pages 249-254, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Geanakoplos & Olivia S. Mitchell & Stephen P. Zeldes, "undated". "Social Security Money's Worth," Pension Research Council Working Papers 97-20, Wharton School Pension Research Council, University of Pennsylvania.
    2. Martus, Bettina, 2015. "Should We Increase Economic Growth or Boost Employment? – The problem of American economic growth," Public Finance Quarterly, Corvinus University of Budapest, vol. 60(2), pages 249-269.
    3. Robert Dimand, 2003. "On Limiting the Domain of Inequality: The Legacy of James Tobin," Eastern Economic Journal, Eastern Economic Association, vol. 29(4), pages 559-564, Fall.
    4. Russell Jesse R., 2012. "Disequilibrium in the International Balance of Payments," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 18(1), pages 1-17, May.
    5. Abdurohman & Budy P. Resosudarmo, 2017. "The Behavior Of Fiscal Policy In Indonesia In Response To Economic Cycles," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(02), pages 377-401, June.
    6. Gnimassoun, Blaise & Mignon, Valérie, 2016. "How Do Macroeconomic Imbalances Interact? Evidence From A Panel Var Analysis," Macroeconomic Dynamics, Cambridge University Press, vol. 20(7), pages 1717-1741, October.
    7. W. Max Corden, 2009. "China's Exchange Rate Policy, Its Current Account Surplus and the Global Imbalances," Economic Journal, Royal Economic Society, vol. 119(541), pages 430-441, November.
    8. Maurice Obstfeld, 2012. "Does the Current Account Still Matter?," American Economic Review, American Economic Association, vol. 102(3), pages 1-23, May.
    9. Beretta, Silvio & Iannini, Giuseppe, 2007. "A US-EU Economic Block versus China? How Viable is it? A Note," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 60(4), pages 409-420.
    10. Miriam Altman, 2001. "Employment promotion in a minerals economy," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(6), pages 691-709.
    11. Bajo-Rubio, Oscar, 2012. "The balance-of-payments constraint on economic growth in a long-term perspective: Spain, 1850–2000," Explorations in Economic History, Elsevier, vol. 49(1), pages 105-117.
    12. James Xiaohe Zhang, 2011. "RMB Appreciation or Fiscal Stimulus, and their Policy Implications," Chapters, in: Lilai Xu (ed.), China’s Economy in the Post-WTO Environment, chapter 9, Edward Elgar Publishing.
    13. repec:ilo:ilowps:456281 is not listed on IDEAS
    14. Martin Wolf, 2008. "Comments On ‘The Global Imbalances: What Is The Problem?’, The 2007 Wincott Lecture, Given By Max Corden," Economic Affairs, Wiley Blackwell, vol. 28(2), pages 59-62, June.
    15. Muqtada, M., 2010. "The crisis of orthodox macroeconomic policy : the case for a renewed commitment to full employment," ILO Working Papers 994562813402676, International Labour Organization.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iae:iaewps:wp2008n25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sheri Carnegie (email available below). General contact details of provider: https://edirc.repec.org/data/mimelau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.