gs_-29_State_and_Market_and_Asian_Neighbors

gs_-29_State_and_Market_and_Asian_Neighbors - ANNOUNCEMENTS...

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1 ANNOUNCEMENTS (#1): ± SCHEDULE OF EXAMS: o TEST #1 –TEST #2 -- TEST #3 – Done! o FINAL EXAM – March 31, 2010 – o Time: 8-10 a.m. Rooms to be announced. o Coverage: ALL TOPICS COVERED IN THE LECTURES & READINGS. 3/17/2010 Econ 11 -- Lecture #29 2 LECTURE #29: TWO MAJOR TOPICS ± WORLD ECONOMIC CRISIS ± ECONOMIC GROWTH IN EAST ASIA: RP AND ITS NEIGHBORS 3/17/2010 Econ 11 -- Lecture #29 3 WORLD ECONOMIC CRISIS (# 1) ± TODAY, THE WORLD ECONOMY IS IN A SERIOUS ECONOMIC “RECESSION” o “RECESSION” – A DECLINE IN OUTPUT DUE TO DECLINE IN AGGREGATE DEMAND o “DEPRESSON” – A SEVERE DECLINE OF OUTPUT, WORSE THAN A RECESSION o MAJOR CHARACTERISTICS – AGGREGATE DEMAND FALLS, UNEMPLOYMENT RISES, SUPPLY OF OUTPUT FALLS
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2 3/17/2010 Econ 11 -- Lecture #29 4 WORLD ECONOMIC CRISIS (#2) ± THE WORLD RECESSION – 2008-2009 o BEGAN IN THE US ECONOMY AS A FINANCIAL CRISIS (THE HOUSING MARKET LENDING CRISIS) o LED TO THE FAILURE OF MAJOR INVESTMENT BANKS IN THE US AND THE RESCUE OF MAJOR FINANCIAL INSTITUTIONS IN THE US o RESULT: CREDIT SYSTEM FROZE: BANK SURVIVAL MEANT THEY COULD NOT LEND TO BUSINESSES; MANY BUSINESSES ON THE BRINK OF COLLAPSE o US PRODUCTIVE ECONOMY: SUFFERED FROM FAILURE OF THE CREDIT MARKET TO FUNCTION EFFECTIVELY (BANKS COULD NOT LEND) WORLD ECONOMIC CRISIS (#3) ± RECESSION SPREADS WORLD WIDE o IN A GLOBALIZED WORLD, FINANCIAL INSTITUTIONS ARE LINKED TOGETHER THROUGH LENDING AND BORROWING. ² FAILURE AMONG MAJOR LENDERS AFFECTS ALL THOSE WITH BUSINESS TRANSACTIONS WITH THEM.
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gs_-29_State_and_Market_and_Asian_Neighbors - ANNOUNCEMENTS...

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