Suchergebnisse

India survived near-crisis situations twice in the 1990s. What determined its ability to learn from the experience of a balance of payments crisis in 1991 to shield the economy from the pressures of the Asian financial crisis in 1997? By linking the two crises within a framework of external and internal economic and political constraints, the paper explains the dynamics of the crises. It argues that India's success can be attributed to five sets of decisions taken during 1991-97: devaluation, engaging the IMF, floating the exchange rate while increasing the central bank's autonomy to intervene against speculative pressures, opening up the external sector while maintaining asymmetric capital controls, and liberalising the financial sector. The paper analyses the options, political opposition and eventual outcomes for each set of decisions. Based on this approach it argues that India's ownership of its reform programme helped set the pace of reform while close interaction between technocrats and the IMF added credibility. But the balance between entrenched traditional interest groups and the demands of new interests determined the scope of reform. Finally, the paper raises broad political questions for the lessons other countries can draw from India's experience.

The growth of the Irish economy in the years 1995-2007 was dramatic and unparalleled by Western economies, earning Ireland the moniker "The Celtic Tiger". Emerging from conditions of high unemployment, very high rates of emigration of graduates, and enormous government debt in the 1980s, the transformation of the Irish economy in two decades was remarkable and lauded by economists and commentators. High growth rates were facilitated by a number of factors, including the presence of a large number of multinationals producing goods for export, generally benign world economic conditions, low interest rates, a low taxation regime, and an expansionary government policy which embraced the tenets of the 'free market'. With the onset of the financial crisis, however, came another rapid transformation in the Irish economy. From being one of the fastest growing Western economies in the late 1990s, in 2009 Ireland suffered the greatest contraction of any OECD country since the second world war. The reasons for this dramatic reversal of fortune were attributable not only to the global financial crisis, but also to government policies and the structure of the Irish economy. In this chapter, the remarkable rise and fall of the Irish economy is described and analysed. Influences on the performance of the Irish economy in this period, including the benign world economy, government policy, and the structure of the Irish economy are analysed and examined. Proposals on how best to initiate recovery are also assessed, particularly the narrow focus of discourse which largely concentrates on attempts to 'fix' the current system, without considering alternative approaches.

India survived near-crisis situations twice in the 1990s. What determined its ability to learn from the experience of a balance of payments crisis in 1991 to shield the economy from the pressures of the Asian financial crisis in 1997? By linking the two crises within a framework of external and internal economic and political constraints, the paper explains the dynamics of the crises. It argues that India's success can be attributed to five sets of decisions taken during 1991-97: devaluation, engaging the IMF, floating the exchange rate while increasing the central bank's autonomy to intervene against speculative pressures, opening up the external sector while maintaining asymmetric capital controls, and liberalising the financial sector. The paper analyses the options, political opposition and eventual outcomes for each set of decisions. Based on this approach it argues that India's ownership of its reform programme helped set the pace of reform while close interaction between technocrats and the IMF added credibility. But the balance between entrenched traditional interest groups and the demands of new interests determined the scope of reform. Finally, the paper raises broad political questions for the lessons other countries can draw from India's experience.

In this study, we examine the relationship between the structure of financial systems and financial crises. Using cross-country data on financial structures and crises, we find that there is a significant short-term reversal in development of the banking sector and the stock market during both bank crises and market crashes, with the corporate bond market moving in the same direction as bank credit. However, the results are significant for countries with market-based financial systems but not for countries with bank-based financial systems. Emerging markets have mainly bank-based financial systems, which may explain why these markets require more time to recover from economic downturns after a financial crisis. Therefore, we argue that governments should emphasize a balanced financial system structure as it helps countries to recover from financial crises more quickly compared with countries that lack such balanced structures.

Abstract Essays on Financial Crisis and Institutions by Sharon Leona Poczter Doctor of Philosophy in Business Administration University of California, Berkeley Professor Paul Gertler, Chair In late 2008, economies worldwide underwent close to complete economic paralysis in what has now been established as the worst financial crisis since the Great Depression. In response, economic research focused on understanding how a well-developed financial market such as the U.S. could fall victim to a severe financial crisis, behavior typically associated with less-developed economies. While important, the examination of the Great Recession is in some respects limited, as it is impossible to understand the long-term effects of the crisis and subsequent government response without post-crisis data. Further, information regarding the details of the implementation of government policy is typically politically sensitive and therefore not readily available to researchers. For these reasons, the empirical economic literature leaves several first order questions regarding the long term effects of financial crisis and subsequent government response unanswered. This dissertation hopes to fill that gap. Using micro-level longitudinal data from the Asian financial crisis of 1997 in Indonesia, I closely examine the long term effects of financial crisis and several government policy responses on firms in the financial and real side sectors. While the economic and institutional environment in Indonesia at that time had unique characteristics, similar reforms were carried not only then in other Asian countries, but during the Great Recession in economies worldwide. In particular, I carry out to my knowledge the first empirical assessment of the long term effects of a bank bailout program. This dissertation, therefore, hopes to provide general insight for economies undergoing severe financial distress, not only those in other emerging markets. Chapter 1 of this dissertation analyzes the long term effects of a bank bailout program on two central policy variables; lending and risk-taking. Using confidential information regarding the selection process of banks for government support, I show that the program was successful at increasing lending but not without increasing the riskiness of investment, even controlling for the amount of lending. This result provides evidence that a bailout policy aimed at simultaneously increasing lending while not engendering increased risk-taking is untenable. Chapter 2 focuses on how patterns of industry evolution in the manufacturing sector change over a financial crisis. As productivity is seen as key for economic growth, it is important for policymakers to understand which firms survive over a financial crisis, and how survivorship impacts long term industry productivity. If financial crisis facilitates "creative destruction", governments may not want to interfere by financially supporting failing firms. However, if gains to productivity following a crisis are not a direct result of creative destruction, other modes of government intervention may be favorable. Using industry decompositions for the population of manufacturing firms over a fifteen year period, I find that the crisis coincided with dramatic changes in productivity patterns within the manufacturing sector and that many of these changes were sustained in the long run. Further, results indicate that post-crisis growth was largely driven by new entry, providing preliminary evidence that reforms aimed at financially supporting lower productivity firms may be misplaced. The final chapter looks at the impact of privatization, another policy reform implemented as a response to the crisis, on firm-level productivity. This paper aims to understand if privatization is successful at increasing productivity in the Indonesian context, and also the mechanisms through which privatization leads to changes in efficiency. I find that privatization increases productivity via change in ownership per se, and that an increase in the competitiveness of the environment does not have a significant effect on changes to the efficiency of firms.

Global financial crisis and its evolution on current world, as each state seeks to manage the global economy in order to protect its citizens from major financial setbacks in the future, become more and more popular issue. The global financial crisis destroys the real estate and financial markets, causes different countries coming into recession, which later has to be overcome not at individual but at larger effort. Most of the time of recession governments must borrow from international institutions, in order to save the country and the commercial banks not letting them to go bankrupt. In the term of financial crisis many people lose their money that has been invested not only in securities but also in the real estate and the unemployment rate begins to grow in leaps. The financial crisis is not just a phenomenon of the last decade. 81 till the Second World War and 182 after the Second World War financial crises, of which ten in one way or another affected the whole world, promote analysis of the attributes between these crises, in order to avoid massive losses across the global economy in the future. The article analyzes the key global financial crises in the last three centuries. The same causes of these crises, the effects and the assumptions enable discussion that the crisis is repeated cyclically. Therefore, one of the stages of the economic business cycle is the crisis. Each country business cycles are manifested in different ways, but during to the impact of globalization after the boom period in the markets, the financial asset price bubbles always burst, letting the crisis affect all the states and therefore causing an occurrence of global financial crisis, classified as a large-scale financial crisis type. Although the biggest global financial crisis happened in different centuries and in different economic conditions, respectively, in 1929 and 2008, there could be seen multiple interfaces between these crises. The central bank is responsible for a stable financial system in the country and in order to effectively manage it, central bank can apply different means of financial stability maintenance, including preventive, administrative and systematic liquidation assistance. DOI: https://doi.org/10.15544/ssaf.2012.27

The article analyzes the role of economists in public discourse with regard to the financial crisis. Specifically, it focuses on the prevailing rhetorical strategies and the economic convictions of leading German-speaking economists as they appear in seven leading newspapers and magazines in the German-speaking area. Special attention is given to the prevailing rationales and explanations for the financial crisis as well as on the metaphors used for describing specific economic events in particular and the market economy in general. The results of this article show that while the financial crisis could have offered a possibility for a paradigm shift in economic thinking, there is not much evidence for such a shift among German-speaking economists. The observed stability of the dominant paradigm is attributed primarily to the very stable role of certain basic economic convictions, which are exposed through the use of specific metaphors as well as a characterization of the financial crisis as a series of extraordinary and exogenously given events. (e.g. "a tsunami" or "earthquake")

The financial crisis has been ongoing from beginning of year 2008 and we still have not reached a point of recovery throughout the European Union. Many European countries, such as Greece, Portugal, Ireland, Spain and Cyprus, received the financial help of international organisations (notably the International Monetary Fund, the European Central bank and the European Commission). Taking into account the public interest as the ultimate goal and objective of the system-wide reforms arising from the start from the financial institutions, namely banks and other financial institutions, it is important to analyse whether the wide economic and social reforms which are still reshaping the democratic setup of these countries really met the public interest objectives. Thus, this article deals with first and foremost the definition of public interest in financial services.

A complete and accessible explanation of the factors contributing to the onset of the 2007 financial and economic crisis. The myriad factors are explained in an orderly way with simple terms. The anticipation (or not) and reception of the crisis by mainstream economists and by Austrian economics leads to reflection on the state of economic theory.