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An Historical Walk Through Recent Financial Crises

Author

Listed:
  • Tadeusz Kowalski

    (Poznan University of Economics)

  • Yochanan Shachmurove

    (Department of Economics, University of Pennsyslvania and The City College of The City University of New York)

Abstract

This paper analyzes the causes and implications of recent financial crises. Financial crises in general lead to changes in both theory and practice of economics. The paper takes an historical overview. The global consensus of economic theory during the 20th century is discussed. The paper describes the Bretton Woods regime after World War II, details the era of adaptive expectations and motivates the emerging of the rational expectations school of thoughts. Various perspectives on the causes of the financial crisis are incorporated. The paper provides some policy suggestions and remarks on the consequences of ever-changing capital markets.

Suggested Citation

  • Tadeusz Kowalski & Yochanan Shachmurove, 2011. "An Historical Walk Through Recent Financial Crises," PIER Working Paper Archive 11-019, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    • Handle: RePEc:pen:papers:11-019
    as

    Download full text from publisher

    File URL: https://economics.sas.upenn.edu/sites/default/files/filevault/11-019.pdf
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    References listed on IDEAS

    as
    1. Alessandra Fogli & Fabrizio Perri, 2006. "The Great Moderation and the U.S. External Imbalance," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 24(S1), pages 209-225, December.
    2. Alan Blinder, 2010. "Teaching Macro Principles after the Financial Crisis," The Journal of Economic Education, Taylor & Francis Journals, vol. 41(4), pages 385-390, September.
    3. Maharashtra Government, 2007. "Commission of Inquiry," Working Papers id:915, eSocialSciences.
    4. repec:pri:cepsud:207blinder is not listed on IDEAS
    5. Crafts, Nicholas & Toniolo, Gianni, 2008. "European Economic Growth, 1950-2005: An Overview," CEPR Discussion Papers 6863, C.E.P.R. Discussion Papers.
    6. Kowalski, Tadeusz, 2002. "The Simonian bounded rationality hypothesis and the expectation formation mechanism," MPRA Paper 33981, University Library of Munich, Germany.
    7. Sheffrin,Steven M., 1996. "Rational Expectations," Cambridge Books, Cambridge University Press, number 9780521479394.
    8. Mordecai Kurz & Hehui Jin & Maurizio Motolese, 2005. "Determinants of stock market volatility and risk premia," Annals of Finance, Springer, vol. 1(2), pages 109-147, July.
    9. Ouarda Merrouche & Erlend Nier, 2010. "What Caused the Global Financial Crisis: Evidenceon the Drivers of Financial Imbalances 1999: 2007," IMF Working Papers 2010/265, International Monetary Fund.
    10. Jose A. Scheinkman & Wei Xiong, 2003. "Overconfidence and Speculative Bubbles," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1183-1219, December.
    11. Alan Blinder, 2010. "Teaching Macro Principles after the Financial Crisis," The Journal of Economic Education, Taylor & Francis Journals, vol. 41(4), pages 385-390, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Larbi Sadiki, 2012. "Libya’s Arab Spring," International Studies, , vol. 49(3-4), pages 285-314, July.

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    More about this item

    Keywords

    Financial crises; The United States Financial Crisis Inquiry Commission; The 2010 Economic Report of the United States President; Keynsian Theory; Adaptive Expectations; Rational Expectations; Monetary and Fiscal Policies; Business Cycles; Regulations; General Agreement on Tariffs and Trade (GATT); World Trade Organization (WTO); Trade Liberalization; United States; China; Euro; Econometric Policy Evaluation;
    All these keywords.

    JEL classification:

    • B0 - Schools of Economic Thought and Methodology - - General
    • E0 - Macroeconomics and Monetary Economics - - General
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F0 - International Economics - - General
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • G0 - Financial Economics - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • K2 - Law and Economics - - Regulation and Business Law
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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