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Government Role During The Global Financial Crisis

Author

Listed:
  • Suleymanov, Elchin
  • Alirzayev, Elvin

Abstract

In this study we investigated government hand in the Global Financial Crisis. Before, during and after crisis government attempted to solve and avoid the turmoil. But did he succeed? Beginning with low interest rates set by FED, US government political pressures to enable more Americans to buy homes, unrestrained financial system despite of regulations and fines, human greedy were the main reasons for Great Recession. More than 30 years of deregulation and reliance on self-regulation by financial institutions was the one big reason for crisis. Besides showing the stages crisis passed, the paper also examines penalties government gave to the financial intermediaries for breaking law in past related to crisis. Showing the emerging process of crisis, the article mainly restricted on US economy - where was the epicenter of problem - and government, while the U.S. financial system stumbles, it may take the rest of the world down with it.The actuality of the topic is that it was also a social crisis because, unemployment in US had reached to 50 millions which means they also lost their social insurances, and 16 million families had lost their homes. Several corporations bankrupted, in spite of more than these were saved by government. While financial crisis turned into social and economic turmoil it became government prior issue to solve.

Suggested Citation

  • Suleymanov, Elchin & Alirzayev, Elvin, 2013. "Government Role During The Global Financial Crisis," MPRA Paper 51592, University Library of Munich, Germany, revised 18 Nov 2013.
  • Handle: RePEc:pra:mprapa:51592
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    File URL: https://mpra.ub.uni-muenchen.de/51592/20/MPRA_paper_51592.pdf
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    References listed on IDEAS

    as
    1. Stephanie Blankenburg & José Gabriel Palma, 2009. "Introduction: the global financial crisis," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 531-538, July.
    2. Campello, Murillo & Graham, John R. & Harvey, Campbell R., 2010. "The real effects of financial constraints: Evidence from a financial crisis," Journal of Financial Economics, Elsevier, vol. 97(3), pages 470-487, September.
    3. Luiz Carlos Bresser-Pereira, 2010. "The global financial crisis and a new capitalism?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 32(4), pages 499-534, July.
    4. L. Wray, 2011. "Minsky's Money Manager Capitalism and the Global Financial Crisis," International Journal of Political Economy, Taylor & Francis Journals, vol. 40(2), pages 5-20.
    5. L. Randall Wray, 2009. "The rise and fall of money manager capitalism: a Minskian approach," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 807-828, July.
    6. John B. Taylor, 2009. "The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong," NBER Working Papers 14631, National Bureau of Economic Research, Inc.
    7. J. Barkley Rosser, 2009. "Introduction," Chapters,in: Handbook of Research on Complexity, chapter 1 Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Global Financial Crisis; US economy; government failure; crisis recovery;

    JEL classification:

    • G0 - Financial Economics - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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