16 October 2009.  Hollowed Out State – does State becomes less relevant  Economic Policy dependence on global sentiments and financial markets  Control.

Slides:



Advertisements
Similar presentations
Chapter 23 The Great Depression.
Advertisements

Supply Side policies. Supply side policies aim to… Improve the efficiency of factor markets, to boost productivity and hence the overall capacity of the.
Financial Crisis of 2008 Econ Worst recession in 80 years How did it happen? How was the situation before the crisis? ‘ Great Moderation’ Stable.
Dr Maurice Mullard Lecture 10.  Financial crisis that started in America with sub prime mortgages  Savings glut thesis on global imbalances China Germany.
The Stock Market Crash Mr. Dodson.
The Emerging market economies and the Great Recession Ahmad Seyf Regent’s University London 26 March 2015 University of Cambridge.
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 1-1 Six Key Economic Variables Real Gross Domestic Product (GDP) –is corrected.
A Worldwide Depression
By: Peter Temin  “This history of the Great Depression…describes real and imagined causes of the depression, bank failures and deflation, the Fed.
The Russian Default of 1998 A case study of a currency crisis Francisco J. Campos, UMKC 10 November 2004.
Dr Maurice Mullard Lecture 4.  Global Economy experience 122 financial crisis since 1945  UK Experienced 8 recessions USA 7 since 1950  Definition.
Toby Sanger, Senior Economist CUPE National 1. 1.Economic crisis and impacts 2.Causes and responses 3.Economic outlook 4.Impact on public services and.
Chapter 11 Business Cycles These slides supplement the textbook, but should not replace reading the textbook.
Chapter 3 Economic Activity in a Changing World pp
1920) World economy = a delicately balanced house of cards. Key card that held up the rest was American economic prosperity. HoJun.
Disinflation, Crisis, and Global Imbalances, Firas Mustafa.
11:1 Causes of the Great Depression Election of 1928
Estonia Another crises country. Background and History Details of the relevant history, pertinent to its economic condition. Position of the.
2-2 Economic Conditions Change
Worldwide Depression. Postwar Europe The Great War left every major European country nearly bankrupt Most European nations had democratic governments.
Unit 4 - Business Fluctuations  Business Fluctuations are ups and downs in economic activity as measured by increases and decreases in real GDP. Macroeconomics.
Economic Activity in a Changing World
2Q | 2011 Guide to the Markets As of March 31, 2011.
Ireland Economy in Crisis Tutor2u Economics February 2009.
Certificate for Introduction to Securities & Investment (Cert.ISI) Unit 1 Lesson 12:  The impact on markets of economic data  Gross Domestic Product.
SS.912.E.3.3 Discuss the effect of barriers to trade and why nations sometimes erect barriers to trade or establish free trade zones Standard 3 Understand.
A Tale of Two Crises: Korea’s Experience with External Debt Management Paper Prepared by Professor Yung Chul Park Seoul National University UNCTAD Expert.
The Nation’s Sick Economy. Industries in Trouble Key industries barely making a profit Mining and lumbering faced diminished demands Key industries barely.
Economic Instability Text Correlation: Chapter 14.
2-2 Economic Conditions Change Objectives: –Describe the four phases of the business cycle –Explain causes of inflation and deflation –Identify the importance.
Unit 1.04 The Business Cycle Measuring Economic Activity.
GREAT DEPRESSION. Great Depression The Great Depression was a time period between 1929 and 1940 in which there was high unemployment and little economic.
IGCSE®/O Level Economics
International Trade. Balance of Payments The Balance of Payments is a record of a country’s transactions with the rest of the world. The B of P consists.
MACRO ECONOMIC GOVERNMENT POLICY. NATIONAL ECONOMIC POLICY GOALS Sustained economic growth as measured by gross domestic product (GDP) GDP is total amount.
The Causes and Cures of the Economic Crisis Dean Baker, Co-Director Center for Economic and Policy Research April 13, 2012.
The Economic Outlook: Recession and Opportunities By Dean Baker Co-Director of the Center for Economic and Policy Research (CEPR)
Introduction to Business, Economic Activity in a Changing World Slide 1 of 54 Why It’s Important Economic activity affects everyday life. The history of.
Measuring economic activity
Economic Activity in a Changing World Chapter 3 pp Mr. Manning.
MACROECONOMICS.  Analyzes interrelationships among sectors of the economy.
Business Cycle & Government interaction in the economy.
Stimulating the Economy By: Jackie Borzillo, Kelsey Silvius, Laurel Young.
1 International Macroeconomics Chapter 8 International Monetary System Fixed vs. Floating.
The Good, The Bad, and The Ugly The Global Financial Crisis The Good, The Bad, and The Ugly The Global Financial Crisis.
Economic Conditions Business Cycle Interest rates Legislation Exchange rates.
The Nation’s Sick Economy The Great Depression (The Hoover Years):
1.02 ~ ECONOMIC ACTIVITIES AND CONDITIONS CHAPTER 2 MEASURING ECONOMIC ACTIVITY.
Protectionism Presented by Representatives of Duzowia.
 Though the economy of the United States appeared to be prosperous during the 1920s, the conditions that led to the Great Depression were created during.
Topic 2: Contemporary World and the Economy From the roaring 20s to the Great Depression to World War 2.
Back to Table of Contents pp Chapter 3 Economic Activity in a Changing World.
How far do you agree with this view?
HW: Quiz on 1920s era (notes and 20.1 Vocab) and the Stock Market Crash.
Reaganomics = supply side/trickle down economics Cut taxes, especially for the wealthy and big business. Cut govt spending. No govt deficit. Keynesian.
Global economic forecast May 18th The economy is recovering strongly, not least because of temporary factors such as a normalisation of inventories.
Objective 1.02 Understand economic conditions 1 Understand the role of business in the global economy.
Recession 2008 : Comparison with The Great Depression Created By: Abhinav Sehgal Akshay Anand Deepika Misra Karishma Jindal Reuben Khanna.
Global economic forecast November 1st The economy has started to recover, but growth is heavily driven by short-term factors, such as a stabilisation.
Global economic forecast November 1st The housing market has stabilised recently but a sustained recovery is unlikely until 2011 Factors putting.
Latest developments in the global outlook, and the situation in Greece 18 February 2015 Alvaro Pereira Director, Country Studies Council.
Economic Activity in a Changing World Chapter 3 pp
A Global Depression. The United States was supporting the rest of the world. If the U.S. fails, what happens to the rest of the world? The Great Depression.
World Wide Depression 1930’s- through early 1940’s.
NEW DEAL OR NO DEAL? THE DEPRESSION DECADE OF THE 1930’S.
Measuring Economic Activity
Why would a country have a current account deficit or surplus?
Economic Activity in a Changing World Chapter 3 pp
Economic Activity in a Changing World Chapter 3 pp
Global Depression By the late 1920s European nations were rebuilding their war-torn economies with loans from the US.
Presentation transcript:

16 October 2009

 Hollowed Out State – does State becomes less relevant  Economic Policy dependence on global sentiments and financial markets  Control over domestic currency  US dollar appreciated 13 per cent after 2009 now fallen 12 per cent in last two months  Good for the US exports grow imports more expensive US move towards export oriented economy rather than consumption

 Forecast UK Deficit PSBR to reach 12 per cent of GDP and national debt 75 per cent of GDP  Why worry?  S Brittan there is no worry look at past histories deficits to pay for war  Also compare with other countries Japan 170 per cent most of Europe above 80 per cent  Worry is about buying government bonds and inflation expectations pushing up interest rates

 Financial Markets close to collapse after bankruptcy of Lehman Brothers and also near collapse of AIG Financial Markets 3 times size of world GDP  Governments worried about financial meltdown all stock exchanges lost 35 per cent of value  World GP 60 trillion dollars world financial markets 175 trillion dollars

 IMF argument that governments needed to avoid repeat of Great depression of 1929  Needed Global response  Governments guaranteeing deposits of investors US Government guarantee of 250,000 dollar accounts through FDIC  UK monetary easing 175 billion pounds  Partial nationalise Lloyds Bank  US bank TALF 750 billion dollars

 The Gold Standard conversion of currency into gold 1925 US main depository of Gold UK Bank of England returned to Gold Standard 1925 increased interest rates made UK less competitive increases in unemployment  Collapse of US Stock Exchange 1928  US Unemployment reached 25 per cent  Election of Roosevelt 1933  Banking Act 1933 Glass Steagill

 Retreat from Globalisation  Protection and Tariffs barriers to trade  Protect infant industries  The Rise of Racism Anti Jewish sentiments  The BUF Mosley Communist and Unemployment Marches  Fragmentation  Weakness of Weimar Republic Nazis win elections 1931

 Worry about inflation when economy has problems of deflation unemployment rising.  Government is a problem even though government can create jobs through stimulus  Banks must act though on credit when credit is needed to boost demand  Ideology of markets  Ideology of Keynesian demand managment

 Market liberalism concern with inflation  Keynesians concern with unemployment  Market economists unemployment should be left to labour markets – workers reduce their wage demands  Decline of manufacturing and high paid jobs in the process of globalisation  New technology and job replacement

 1950 to 1970 Wages rising inequality falling  Full employment trade unions  Lates 1970s return to markets tax reductions for high incomes  Return to inequality  Decline of trade unions  Wages stop rising

 122 recessions since 1945 on global scale  UK eight recessions  US seven recessions  All start in financial sector  Falling house prices bubbles  Falling equity markets bubbles  Ripple effects financial to real economy  Banks too big to fail  Moral Hazard