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on Post Keynesian Economics |
| By: | L. Randall Wray |
| Abstract: | This paper provides a quick review of the causes of the Global Financial Crisis that began in 2007. There were many contributing factors, but among the most important were rising inequality and stagnant incomes for most American workers, growing private sector debt in the United States and many other countries, financialization of the global economy (itself a very complex process), deregulation and desupervision of financial institutions, and overly tight fiscal policy in many nations. The analysis adopts the "stages" approach developed by Hyman P. Minsky, according to which a gradual transformation of the economy over the postwar period has in many ways reproduced the conditions that led to the Great Depression. The paper then moves on to an examination of the US government's bailout of the global financial system. While other governments played a role, the US Treasury and the Federal Reserve assumed much of the responsibility for the bailout. A detailed examination of the Fed's response shows how unprecedented—and possibly illegal-was its extension of the government's "safety net" to the biggest financial institutions. The paper closes with an assessment of the problems the bailout itself poses for the future. |
| Keywords: | Hyman Minsky; Global Financial Crisis; Financialization; Money Manager Capitalism; Bank Bailout; Quantitative Easing; Financial Crisis Inquiry Report; Fraud; Minsky Moment; Real Estate Bubble; MERS; Federal Reserve |
| JEL: | B31 E30 E32 E50 G21 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_711&r=pke |
| By: | E. Roy Weintraub |
| Keywords: | John Maynard Keynes, discrimination, history of economics |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hop:hopeec:12-02&r=pke |
| By: | Manning, Richard |
| Abstract: | Most rich countries developed without aid, and this .self-development. has some intrinsic advantages. In today.s massively unequal world, however, such an approach would imply very low levels of human development for several generations for many poor countries. Aid can therefore usefully be thought of as a necessary but .second-best option.. The challenge then is how to manage this second-best option, particularly in the more aid-dependent states and the more fragile environments, in order to achieve sustainable results. The study examines seven problems that can limit the effectiveness of aid, and suggests possible ways of tackling them. |
| Keywords: | aid, aid effectiveness, development |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-24&r=pke |
| By: | Rubén Hernández-Murillo; Andra C. Ghent; Michael T. Owyang |
| Abstract: | No. In this paper we use a regression discontinuity approach to investigate whether affordable housing policies influenced origination or affected prices of subprime mortgages. We use merged loan-level data on non-prime securitized mortgages with individual- and neighborhood-level data for California and Florida. We find no evidence that lenders increased subprime originations or altered pricing around the discrete eligibility cutoffs for the Government Sponsored Enterprises (GSEs) affordable housing goals or the Community Reinvestment Act. Our results indicate that the extensive purchases of risky private-label mortgage-backed securities by the GSEs were not due to affordable housing mandates. |
| Keywords: | Subprime mortgage ; Community Reinvestment Act of 1977 ; Government-sponsored enterprises |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2012-005&r=pke |
| By: | Charles Goodhart; Anil K Kashyap; Dimitrios Tsomocos; Alexandros Vardoulakis |
| Abstract: | This paper explores how different types of financial regulation could combat many of the phenomena that were observed in the financial crisis of 2007 to 2009. The primary contribution is the introduction of a model that includes both a banking system and a “shadow banking system” that each help households finance their expenditures. Households sometimes choose to default on their loans, and when they do this triggers forced selling by the shadow banks. Because the forced selling comes when net worth of potential buyers is low, the ensuing price dynamics can be described as a fire sale. The proposed framework can assess five different policy options that officials have advocated for combating defaults, credit crunches and fire sales,namely: limits on loan to value ratios, capital requirements for banks, liquidity coverage ratios for banks, dynamic loan loss provisioning for banks, and margin requirements on repurchase agreements used by shadow banks. The paper aims to develop some general intuition about the interactions between the tools and to determine whether they act as complements and substitutes. |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgdps:dp702&r=pke |
| By: | Susanne B. Hecht |
| Abstract: | Catastrophic deforestation and environmental degradation have become habits of thought about forest landscapes in Latin America's tropics. Yet these truisms blind analysts to three surprising changes. First, deforestation has slowed dramatically. Next, forest resurgence-largely a function of natural regeneration-is widely documented throughout the region on previously deforested lands. Finally, the importance of tree systems and complex environmental mosaics in working landscapes to produce livelihoods and environmental services and as supporting matrices for conservation is increasingly recognized. These dynamics over the last decade would have been unimaginable in the 1980s, the period that most shaped Euro-American perceptions of tropical forest trends. Deforestation "hot spots", each with a different political ecology, remain and command attention, but it is important to recognize that platforms for alternatives exist. Latin America has become an innovator in tropical environmental policy, institutions, incentives, and practices that support forested landscapes. These dynamics and other related issues will be further elucidated in this document. |
| Keywords: | Agriculture & Food Security, Environment & Natural Resources :: Biodiversity & Natural Resources Management, Environment & Natural Resources :: Climate Change, Environment & Natural Resources :: Forests & Forestry, Forest, forest resurgence, environmental services |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:64998&r=pke |
| By: | Alberto, Chilosi |
| Abstract: | After the demise of “real” socialism and the decline of “western” socialism, socialism can be salvaged as a social preference system oriented towards equality and social justice, to be implemented without systemic constraints in the organizational and institutional sense. At the same time there is a case for maintaining an institutional framework allowing different forms of economic organization,capitalist and non-capitalist,to compete on equal footing, in an evolutionary perspective, thus allowing the second to develop if proven efficient. Another way for a spontaneous extension of the domain of socialism could derive from the socialization of consumption, if the consumption of public goods continues to make up a growing component of real consumption. |
| Keywords: | Socialism; Capitalism; Socialization of Consumption |
| JEL: | P50 |
| Date: | 2012–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37828&r=pke |