Florida, R. (2009). Passing the Buck-Economy in Crisis?. In g. Goshgarian & K. Krueger (2011),
-2. The background of the financial crisis.—what kind of monetary policy the federal reserve made?
Sturzenegger, Federico, and Jeromin Zettelmeyer. Debt defaults and lessons from a decade of crises. MIT press, 2006.
What at first seemed to be an economic slump turned into a brutal crisis, and all eyes looked to the Government and Federal Reserve to help the economy. With the large amount of debt the economy faced the Federal Reserve stepped in and bailed out the banks in an attempt to smooth over the financial struggles of the economy. The banks that survived took precautionary measures, making it difficult for businesses and consumers to borrow (Love, 2011). Thus leading to businesses failing and less jobs being created. The large amount of debt had also taken its toll on the job market. Between 2007 and 2009 employment dropped by 8 million workers, causing the unemployment rate to go from 4.7 percent to 10 percent (McConnell, 2012).
Taylor, J. B. (2009). The financial crisis and the policy responses: An empirical analysis of what
Financial crises are a constant theme through generations. People can lose all their savings and somehow the richest 1% of the country will stay above the cumulative distributive mean of average earnings. It seems that everyday working middle class people are effected through these catastrophes losing all of their savings and future generations are now forever. Through evaluating the similarities and differences between the Great Depression of the 1930’s and the Great Recession of 2007/2008, we can learn how future financial crises can be avoided.
These crises brought the global financial system to the point of collapse. The U.S. Federal Reserve took steps to expand money supplies. The U.S. gave nearly 1 trillion dollars worth of two stimulus packages in 2008/2009. The reaction of the Federal Reserve was immediate. In the last quarter of 2008, the central banks purchased 2.5 trillion US dollars of debt and private assets from banks. This was the largest liquidity insertion into the credit market, and in the history of this world it was the largest monetary policy action. The U.S. and European governments raised the capital of their national banking systems by $1.5 trillion, by purchasing newly issued preferred stock in their major banks. Governments also bailed out lots of firms by taking over their large financial obligations.
The Obama administration’s fiscal policy has been moderately successful (seven out of ten rating), in that America was brought out of the Great Recession of 2008, but lately, excess spending has smothered the growth of the U.S. economy. One of Obama’s most controversial, but successful, actions was the automotive industry bailout in 2009, when Obama approved a several billion-dollar loan in order to prevent job loss by bailing out GM, Chrysler, and GMAC from going bankrupt. Secondly, the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010 provided Wall Street reforms and consumer protection in order to prevent another recession of the same nature. Furthermore, the Obama administration implemented the Tax Relief, Unemployment Insurance
Despite of its’ strength and financial background the United States of America’s economy witnessed between the period of 2007 to 2010, what is termed by Embrechts (pp 1-33) as the worst economic recession after the great depression of 1930’s. The financial melt down which started in the year 2007 up to date, has been largely attributed to the banking sector of the country and it exposed the 21st century Americans to nearly what was experienced in the 1930’s great depression.
...avoiding even deeper collapse of the global GDP and of employment. The government also created the Troubled Asset Relief Program (TARP), for the establishment and administration of the treasury fund, in an effort to control the ongoing crisis.
As the subject of this critical analysis paper I have chosen the November 2013 online article “What We’ve Learned from the Financial Crisis” from the Harvard Business Review at http://hbr.org/2013/11/what-weve-learned-from-the-financial-crisis/ar/1 by executive editor Justin Fox.
Shortly after the financial crisis in 2008, many economists had to rethink their approach to the market. Everyone knew we had a panic because the stock market and the housing market collapsed. American economy was reaching to the bottom. Many people considered it as a second worst recession after the great the Great Depression. But what was the cause? Who were responsible for the crisis? What can we learn from this turmoil? In the recent New York Times Sunday magazine article, Nobel Prize winner Paul Krugman offered his explanation for the causes and insight toward fixing the economy.
The article titled “You Are What You Owe,” centers around the recent gridlock in Washington over the debt ceiling (Mallaby, 2011). The article explores what would have happened had the United States government not come to an agreement on the American debt ceiling. The article also relates the United States crisis to previous counties that have faced this crisis in the past (Mallaby, 2011). The article reports on the finance and economic conditions in 2011 in the United States during the debt crisis (Mallaby, 2011). The article also discusses the American credit and bond strength and government’s securities, as well as the United States federal debt (Mallaby, 2011). The Gross Domestic Product or GDP, for different countries is also discussed in this recent article (Mallaby, 2011). The United States foreign economic relationships are also explored in the article titled, “Yo...
IMF Staff Position Note. (2009, March 6). The Case for Global Fiscal Stimulus. Retrieved from http://www.imf.org/external/pubs/ft/spn/2009/spn0903.pdf
Velde,D.K (2008). The global financial crisis and developing countries. Available at: http://www.odi.org.uk/resources/download/2462.pdf (Accessed: 5th August 2010).