This study presentation looks at the causes and consequences of different types of financial crisis. It also focuses on the Hyman Minsky theory of financial instability in a capitalist economic system.
balance of payment and its components, types.
difference between bop &bot.
foreign exchange rate and system.
determination of exchange rate.
exchange market.
This revision presentation is designed for students revising their A2 macroeconomics. It looks at the economics of currency markets and focuses in particular on different exchange rate systems and the debate over fixed versus floating currencies.
Argentine economic depression was a major downturn in Argentina's economy. It began in 1999 with a decrease of real Gross Domestic Product (GDP). The crisis caused the fall of the government, default on the country's foreign debt, widespread unemployment, riots, the rise of alternative currencies and the end of the peso's fixed exchange rate to the US dollar.
By 2002 GDP growth had returned, surprising economists and the business media.
The 2008 global financial crisis is said to be the worst financial problem to have faced the world since the Great Depression of the 1930s. The financial crisis was preceded by an economic boom of some sort and high investment levels. In fact, prior to this crisis, many economists had voiced their concerns over the amount of credit flow in the US as well as investments. So what really caused this financial catastrophe and what effects did it have on America and the world at large?
This article will discus the Causes of the Global Financial Crisis of 2008
- See more at: http://www.customwritingservice.org/blog/the-global-financial-crisis-of-2008-causes-and-effects/
This paper examines the contagion of the eurozone debt crisis to developed and emerging stock markets around the world. Using the VAR methodology, and changes in sovereign bond yields and stock returns of the crisis countries as proxies for the eurozone debt crisis, this paper finds strong and pervasive evidence of negative contagion from the crisis countries to other stock markets. Consistent with risk-on risk-off hypothesis, changes in sovereign bond yields of crisis countries impact stock returns positively during normal times and negatively during the crisis, providing strong evidence of negative contagion. The impact of equity returns of crisis countries on other equity markets is large and positive during normal times and less positive during the crisis, suggesting evidence of negative contagion and decoupling of stock markets during the crisis. The Asian markets do not show pervasive evidence of contagion from the eurozone crisis.
This study presentation looks at the causes and consequences of different types of financial crisis. It also focuses on the Hyman Minsky theory of financial instability in a capitalist economic system.
balance of payment and its components, types.
difference between bop &bot.
foreign exchange rate and system.
determination of exchange rate.
exchange market.
This revision presentation is designed for students revising their A2 macroeconomics. It looks at the economics of currency markets and focuses in particular on different exchange rate systems and the debate over fixed versus floating currencies.
Argentine economic depression was a major downturn in Argentina's economy. It began in 1999 with a decrease of real Gross Domestic Product (GDP). The crisis caused the fall of the government, default on the country's foreign debt, widespread unemployment, riots, the rise of alternative currencies and the end of the peso's fixed exchange rate to the US dollar.
By 2002 GDP growth had returned, surprising economists and the business media.
The 2008 global financial crisis is said to be the worst financial problem to have faced the world since the Great Depression of the 1930s. The financial crisis was preceded by an economic boom of some sort and high investment levels. In fact, prior to this crisis, many economists had voiced their concerns over the amount of credit flow in the US as well as investments. So what really caused this financial catastrophe and what effects did it have on America and the world at large?
This article will discus the Causes of the Global Financial Crisis of 2008
- See more at: http://www.customwritingservice.org/blog/the-global-financial-crisis-of-2008-causes-and-effects/
This paper examines the contagion of the eurozone debt crisis to developed and emerging stock markets around the world. Using the VAR methodology, and changes in sovereign bond yields and stock returns of the crisis countries as proxies for the eurozone debt crisis, this paper finds strong and pervasive evidence of negative contagion from the crisis countries to other stock markets. Consistent with risk-on risk-off hypothesis, changes in sovereign bond yields of crisis countries impact stock returns positively during normal times and negatively during the crisis, providing strong evidence of negative contagion. The impact of equity returns of crisis countries on other equity markets is large and positive during normal times and less positive during the crisis, suggesting evidence of negative contagion and decoupling of stock markets during the crisis. The Asian markets do not show pervasive evidence of contagion from the eurozone crisis.
Case Study - Financial Crisis of 1997 - South Korea
1. Political and Economical History
2. Causes Of Financial Crisis
3. Consequences Of Financial Crisis
4. Recovery Measures
5. Current Situation - Political & Economical
6. Vulnerability of Current Economic situation to another future financial crisis
7. Economic Projections
8. Recommendation to save South Korea from another Hit
The Asian financial crisis was a period of financial crisis that gripped much of East Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion.
Financial contagion refers to “the spread of market disturbances -- mostly on the downside -- from one country to the other, a process observed through co-movements in exchange rates, stock prices, sovereign spreads, and capital flows." Financial contagion can be a potential risk for countries who are trying to integrate their financial system with international financial markets and institutions. It helps explain an economic crisis extending across neighboring countries, or even regions.
A situation in which the wealth of a nation or State or country experiences a sudden downturn brought on by a financial crisis. An economy facing an economic crisis will most likely experience a falling national output, a drying up of liquidity and inflation/deflation. An economic crisis can take the form of a recession or depression.
Provides an overview of the reseach of Ghosh and Ramakrishnan on current account deficits: what they are, how they are measured and whether they matter.
De los 15 mercados objeto de estudio, sólo Sudáfrica y Turquía muestran debilidad en los tres factores de riesgo.
Cinco mercados, Brasil, Chile, Hungría, México y Polonia, se muestran vulnerables en dos de los tres factores de riesgo.
Ocho mercados, Hong Kong, India, Indonesia, Israel, Malasia, Rumanía, Rusia y Corea del Sur, muestran salvedades en uno de los tres factores de riesgo.
Can investors bet on a broad emerging markets recoveryteam-abr
Following the 2008 financial crisis, emerging economies rebounded. But since 2011 things have changed.
Emerging economies are now richer than ever. And while these countries still have an opportunity to grow in the future, their growth rates are likely to be slower than in the past.
As advanced economies recover and their monetary policies return to more conventional policies, further weakness in emerging markets’ equities and bond markets is expected.
1. Leading Indicators of a Currency Crisis: From Fundamentals to Contagion Edward Mongon, Syed Zillur Rehman, and Divya Yerraguntla International Capital Markets 11/25/08
In the long run, a currencies value mirrors the fundamental strength of the underlying economy. In the short run, investor sentiment plays an important role. “ Fight or flight” mentality Currency crises becoming self-fulfilling prophecies
First Generation Models (Krugman, 1979) Focus on macroeconomic fundamentals and fiscal/monetary policy Excessive expansionary monetary and/or fiscal policy eventually leads to a recurrent loss of international reserves that ultimately makes crisis unavoidable. Political/legal instabilities act to augment risk. Second Generation Models (1992) Focus on the relationship between investor expectations and actual results from policymaking. “ A currency crisis can be thought of as a shift in expectations toward the devaluation outcome. Such a shift suddenly makes the defense of the exchange rate peg excessively costly.” – Paolo Pesenti and Cedric Tille Investor sentiment of long-term macroeconomic movements plays a large role in future currency crises Third Generation Models (1992) Point to the role of contagion “ In the absence of common shocks, a currency crisis can be transmitted from one country (A) to another (B) if structural links and international spillovers make the economies of countries A and B interdependent. That is, if the currency devaluation by country A has a negative impact on country B’s fundamentals, it will eventually force country B’s currency devaluation.” – Pesenti and Tille Links in trade and finance Economies of developing countries with liberal laws regarding capital flows are more susceptible to crisis than those nations with strict controls on foreign investment/repatriation.
Capital Account Explained Includes all purchases and sales of assets, such as stocks, bonds, banks accounts, real estate, and businesses.” – Eun and Resnick. In aggregate, represents the difference between the sale of US assets to foreign nations and the purchase of foreign assets by the U.S. Variables that may act as leading indicators from the Capital Account include: reserves, real interest rate differential, foreign debt/exports, capital flight.
Exchange rate depreciation - At the beginning of the year, the spot rate was about 15,800 dong per U.S. dollar. During the middle of the summary, the rate moved to about 16,800 dong per U.S. Dollar. Much of this is due to the widening the band at which the dong may fluctuate from the dollar.
Argentina is likely to undergo another currency crisis because of High inflation rate (official 8% vs actual 25%) 40% debt in form of government issued inflation linked bond yielding 8.9% domestic default Irresponsible fiscal and monetary policies Introduced export taxes, upset farmers (mainly commodities such as soybean, corn. Pension funds became public to pay off foreign debt. Low interest rate resulting in inflation (failed to raise it during good times) Overvalued exchange rate 1$ (US) : 3.30 (Arg peso) (‘defending at all cost’ approach by depleting reserves, won’t be able to sustain for long) Current account reduction In 2007, it was $2.812 (%change: -48.05) In 2008, it is $1.816 (% change: -57.82) Decrease in GDP growth In 2008, it reduced by 19.74%. No trust on government Argentineans have low level of confidence because of past experiences, withdrawing money in large amounts which may lead to run on banks. Investors and creditors especially foreigners are afraid because of previous default. Declining commodity prices Exporter of soybean, corn, would see drastic reduction in balance of payment account. Hugo Chavez won’t come to rescue, decreasing oil prices and other internal political problems.
Argentina is likely to undergo another currency crisis because of High inflation rate (official 8% vs actual 25%) 40% debt in form of government issued inflation linked bond yielding 8.9% domestic default Irresponsible fiscal and monetary policies Introduced export taxes, upset farmers (mainly commodities such as soybean, corn. Pension funds became public to pay off foreign debt. Low interest rate resulting in inflation (failed to raise it during good times) Overvalued exchange rate 1$ (US) : 3.30 (Arg peso) (‘defending at all cost’ approach by depleting reserves, won’t be able to sustain for long) Current account reduction In 2007, it was $2.812 (%change: -48.05) In 2008, it is $1.816 (% change: -57.82) Decrease in GDP growth In 2008, it reduced by 19.74%. No trust on government Argentineans have low level of confidence because of past experiences, withdrawing money in large amounts which may lead to run on banks. Investors and creditors especially foreigners are afraid because of previous default. Declining commodity prices Exporter of soybean, corn, would see drastic reduction in balance of payment account. Hugo Chavez won’t come to rescue, decreasing oil prices and other internal political problems.
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