Publishing Institution: The Cato Institute / Topic: Global Recession

Author:: Tobias Adrian
Publication Date:: 06-2019
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: In the decade since the global financial crisis, there has understandably been great concern about potential threats to global financial stability, and policymakers have wisely remained vigilant in watching for warning signs of possible economic risk. At the International Monetary Fund (IMF), we remain committed to providing our 189 member countries with farsighted analyses of trends in the financial markets, thus guiding them toward sound policy choices that help maintain economic stability.
Topic:: International Trade and Finance, Global Recession, Financial Crisis, Economy, Economic growth, Risk, IMF, and Financial Stability
Political Geography:: Global Focus

Author:: Mark A. Calabria
Publication Date:: 09-2014
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Empirical research on the causes of financial crises has grown in recent decades. Early work, such as that by Kaminsky and Reinhart, helped establish the link between asset prices and banking crises. While this initial research focused on equity prices, subsequent research expanded the analysis to include residential property prices. This subsequent research is briefly reviewed here. After establishing the link between residential property prices and banking crises, I discuss the role of various credit policies, both for their impact on property prices and for the stability of the financial system in the face of declining property prices. The role of specific loan characteristics, such as loan-to-value (LTV), will be discussed first, followed by the role of institutional leverage. Policy recommendations conclude.
Topic:: Debt, Global Recession, Financial Crisis, and Governance

Author:: Patric H. Hendershott and Kevin Villani
Publication Date:: 03-2012
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The current narrative regarding the 2008 systemic financial system collapse is that numerous seemingly unrelated events occurred in unregulated or underregulated markets, requiring widespread bailouts of actors across the financial spectrum, from mortgage borrowers to investors in money market funds. The Financial Crisis Inquiry Commission, created by the U.S. Congress to investigate the causes of the crisis, promotes this politically convenient narrative, and the 2010 Dodd-Frank Act operationalizes it by completing the progressive extension of federal protection and regulation of banking and finance that began in the 1930s so that it now covers virtually all financial activities, including hedge funds and proprietary trading. The Dodd-Frank Act further charges the newly created Financial Stability Oversight Council, made up of politicians, bureaucrats, and university professors, with preventing a subsequent systemic crisis.
Topic:: Economics, Government, Markets, Global Recession, and Financial Crisis
Political Geography:: United States

Author:: Jared Lobdell
Publication Date:: 11-2011
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: An October New York Times story remarked that “with just five weeks until its deadline, a secretive Congressional committee seeking ways to cut the federal deficit is far from a consensus, and party leaders may need to step in if they want to ensure agreement, say people involved in the panel's work.” We have this “supercommittee” of twelve members of Congress, ostensibly for the purpose of cutting a minimum $1.2 trillion from our deficit, chosen by four appointers, none agreeing with any other on exactly what ought to be done, representing mostly diametrically opposing wings of two parties with irreconcilable differences.
Topic:: Debt, Economics, Global Recession, Monetary Policy, and Financial Crisis
Political Geography:: United States

Author:: Laurence Copeland
Publication Date:: 09-2010
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: In response to the recent financial crisis, many governments chose to ban or restrict short sales, hoping to mitigate the impact of the stock market downturn. Stock markets function as a continuous election, held to determine the allocation of resources with buyers voting for and sellers voting against investment in particular stocks. Banning short selling is akin to disenfranchising the "no" voter, thereby creating a distortion in the resource allocation process. Ban-induced price distortions damage the integrity of stock prices among investors and potentially cause stocks to expand beyond what is optimal for the firms and the economy.
Topic:: Economics, Markets, Global Recession, and Financial Crisis
Political Geography:: Washington

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