1,721,200 research outputs found
Carmen M. Reinhart y Kenneth S. Rogoff, Esta vez es distinto. Ocho siglos de necedad financiera, Madrid, Fondo de Cultura Económica, 2011
Full text linkNota de lectura del libro Carmen M. Reinhart y Kenneth S. Rogoff, Esta vez es distinto. Ocho siglos de necedad financiera, Madrid, Fondo de Cultura Económica, 201
Rezension: Carmen M. Reinhart / Kenneth S. Rogoff: Dieses Mal ist alles anders: acht Jahrhunderte Finanzkrisen
Full text linkCarmen M. Reinhart und Kenneth S. Rogoff verfolgen mit ihrem aufsehenerregenden, jetzt von Almuth Braun exzellent ins Deutsche übersetzten Buch zwei Ziele: Zum einen schließen sie an die bemerkenswerte Tradition amerikanischer Spitzenforscher an, schwierige Forschungsgegenstände allgemeinverständlich zu erklären – in diesem Fall die Subprime-Krise in den Vereinigten Staaten von Amerika und die darauf folgende Wirtschaftskrise. Zum anderen bringt das breit angelegte Buch die Subprime-Krise in Verbindung mit anderen Finanzkrisen der Vergangenheit und ist daher auch als ein Werk der Wirtschaftsgeschichte zu verstehen. Die Analyse erstreckt sich über nicht weniger als 66 Länder und acht Jahrhunderte. Dabei werden sowohl Auslandsschuldenkrisen von Staaten, als auch deren Inlandsschuldenkrisen und Bankenkrisen (also massive Zahlungsausfälle im Geschäfts- und vor allem Privatkundenbereich) unter dem Begriff "Finanzkrisen" zusammengefasst. Das ist neu, es ist kreativ - und es führt zu zahlreichen interessanten Ergebnissen
A Decade of Debt
Full text linkThis paper presents evidence that public debts in the advanced economies have surged in recent years to levels not recorded since the end of World War II, surpassing the heights reached during the First World War and the Great Depression. At the same time, private debt levels, particularly those of financial institutions and households, are in uncharted territory and are (in varying degrees) a contingent liability of the public sector in many countries. Historically, high leverage episodes have been associated with slower economic growth and a higher incidence of default or, more generally, restructuring of public and private debts. A more subtle form of debt restructuring in the guise of “financial repression” (which had its heyday during the tightly regulated Bretton Woods system) also importantly facilitated sharper and more rapid debt reduction than would have otherwise been the case from the late 1940s to the 1970s. It is conjectured here that the pressing needs of governments to reduce debt rollover risks and curb rising interest expenditures in light of the substantial debt overhang (combined with the widespread “official aversion” to explicit restructuring) are leading to a revival of financial repression—including more directed lending to government by captive domestic audiences (such as pension funds), explicit or implicit caps on interest rates, and tighter regulation on cross-border capital movements.
A Decade of Debt
Full text linkThis book presents evidence that public debts in the advanced economies have surged in recent years to levels not recorded since the end of World War II, surpassing the heights reached during the First World War and the Great Depression. At the same time, private debt levels, particularly those of financial institutions and households, are in uncharted territory and are (in varying degrees) a contingent liability of the public sector in many countries. Historically, high leverage episodes have been associated with slower economic growth and a higher incidence of default or, more generally, restructuring of public and private debts. A more subtle form of debt restructuring in the guise of “financial repression” (which had its heyday during the tightly regulated Bretton Woods system) also importantly facilitated sharper and more rapid debt reduction than would have otherwise been the case from the late 1940s to the 1970s. It is conjectured here that the pressing needs of governments to reduce debt rollover risks and curb rising interest expenditures in light of the substantial debt overhang (combined with the widespread “official aversion” to explicit restructuring) are leading to a revival of financial repression—including more directed lending to government by captive domestic audiences (such as pension funds), explicit or implicit caps on interest rates, and tighter regulation on cross-border capital movements.
The Aftermath of Financial Crises
Full text linkThis paper examines the depth and duration of the slump that invariably follows severe financial crises, which tend to be protracted affairs. We find that asset market collapses are deep and prolonged. On a peak-to-trough basis, real housing price declines average 35 percent stretched out over six years, while equity price collapses average 55 percent over a downturn of about three and a half years. Not surprisingly, banking crises are associated with profound declines in output and employment. The unemployment rate rises an average of 7 percentage points over the down phase of the cycle, which lasts on average over four years. Output falls an average of over 9 percent, although the duration of the downturn is considerably shorter than for unemployment. The real value of government debt tends to explode, rising an average of 86 percent in the major post-World War II episodes. The main cause of debt explosions is usually not the widely cited costs of bailing out and recapitalizing the banking system. The collapse in tax revenues in the wake of deep and prolonged economic contractions is a critical factor in explaining the large budget deficits and increases in debt that follow the crisis. Our estimates of the rise in government debt are likely to be conservative, as these do not include increases in government guarantees, which also expand briskly during these episodes.
Growth in a Time of Debt
Full text linkWe study economic growth and inflation at different levels of government and external debt. Our analysis is based on new data on forty-four countries spanning about two hundred years. The dataset incorporates over 3,700 annual observations covering a wide range of political systems, institutions, exchange rate arrangements, and historic circumstances. Our main findings are: First, the relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more. We find that the threshold for public debt is similar in advanced and emerging economies. Second, emerging markets face lower thresholds for external debt (public and private)—which is usually denominated in a foreign currency. When external debt reaches 60 percent of GDP, annual growth declines by about two percent; for higher levels, growth rates are roughly cut in half. Third, there is no apparent contemporaneous link between inflation and public debt levels for the advanced countries as a group (some countries, such as the United States, have experienced higher inflation when debt/GDP is high.) The story is entirely different for emerging markets, where inflation rises sharply as debt increases.
Impact of globalization on monetary policy
Full text linkMonetary policy ; Globalization ; Banks and banking, Central ; Inflation (Finance) ; Stocks
From Financial Crash to Debt Crisis
Full text linkNewly developed long historical time series on public debt, along with modern data on external debts, allow a deeper analysis of the cycles underlying serial debt and banking crises. The evidence confirms a strong link between banking crises and sovereign default across the economic history of great many countries, advanced and emerging alike. The focus of the analysis is on three related hypotheses tested with both “world” aggregate levels and on an individual country basis. First, private debt surges are a recurring antecedent to banking crises; governments quite contribute to this stage of the borrowing boom. Second, banking crises (both domestic ones and those emanating from international financial centers) often precede or accompany sovereign debt crises. Indeed, we find they help predict them. Third, public borrowing accelerates markedly ahead of a sovereign debt crisis; governments often have “hidden debts” that far exceed the better documented levels of external debt. These hidden debts encompass domestic public debts (which prior to our data were largely undocumented).
Book review : The precursors of financial crises
Full text link"This time is different: eight centuries of financial folly" by Carmen M. Reinhart and Kenneth S. Rogoff. Princeton : Princeton University Press, 2009, 463p.Books - Reviews
Review of “This Time is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth S. Rogoff”
Full text linkThis Time is Different: Eight Centuries of Financial Folly is one of the best, if not the best, books ever written on the history of financial crises. It presents a comprehensive survey of financial crises utilizing an extraordinary database of macroeconomic and financial series. The massive data analysis constituting the core of the manuscript leads the authors to arrive at a simple but powerful conclusion: while times change, locations change, actors change, financial crises often exhibit more similarities than differences throughout history. This conclusion nicely relates to the title of the book as it proves wrong the claim “this time is different” that is often heard during boom times preceding crises. The book is a must read for anyone interested in economics and finance. This review presents a brief summary of the book and a discussion about its implications for future research.
- …
