FINANCIALCRISISCLASS

FINANCIALCRISISCLASS - 1 Financial Crisis etc Practical...

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Unformatted text preview: 1 Financial Crisis, etc ¡ Practical Macroeconomics ¡ Financial Crisis of 2007 ¡ Current 1 Controversy ¡ Krugman return of dep econ In the News? 2 Course Issues ¡ LAST CLASS – Friday 12/10 o Investment Game, Suggestions Weds noon ¢ Extra Credit – fri, post on assignments (attachment) ¡ FINAL EXAM ¢ How to study – Review Guide, Essential Questions ¢ Chat Room, Study groups 3 ¢ Q&A ¢ Course Evals & Surveys (3) ¡ FINAL EXAM CONFLICTS –see me NOW ¢ Finalexams.rutgers.edu ¡ Q&A Tues 12/14 1pm Sc 103 ¡ FINAL EXAM Thurs 12/16 noon Milledoler 100 2 Panics, Manias, Bubbles ¡ 1637 Tulip Mania – speculative bubble ¢ Netherlands, tulip prices rose to 10x annual incomes, then collapsed ¡ 1720 South Seas Bubble, ¢ stock speculation in British stock company ¢ Company established to fund gov’t debt ¢ 10 fold increase in stock price in year ¡ John Law and Mississippi Bubble ¢ Scottish economist -became French Comptroller Generale ¢ First central bank of France 4 U.S. Crises ¡ Panic of 1893 - railroads, bank failures ¡ Panic of 1896– silver reserves ¡ Panic of 1901 – NYSE crash – robber barons clash ¡ Panic of 1907 – bank failures, recession ¡ Wall Street Crash/Great Depression 1929 ¢ Speculative bubble in stocks, real estate, fed raises rates, depression ¡ 1987 Black Monday – largest 1 day % decline in stock prices. Quick recover, Greenspan 5 More ¡ 1994 Tequilla Crisis – Mexico ¡ 1997 Asian Financial Crisis ¡ 2001 Dot Com Bubble bursts ¡ 2007 Subprime Financial Crisis ¡ Always This time it’s different ¡ Mark Twain History may not repeat itself, but it sure does rhyme 6 3 Types and Causes ¡ Banking crises – liquidity , no lender of last resort, mis-match of maturities of assets and liabilities (borrow short, lend long), solvency-speculative losses, leverage ¡ Speculative bubbles – psychological, monetary policy ¡ International financial crises – fixed exchange rates, hot money, speculative attacks ¡ 2007 ?2007 ?...
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This note was uploaded on 02/20/2012 for the course 220 301 taught by Professor Carlshu-minglin during the Fall '10 term at Rutgers.

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FINANCIALCRISISCLASS - 1 Financial Crisis etc Practical...

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