Global Economy Proposed Paper Topic (About Finance) – Book Report/Review Example
Lecturer Essay # Understanding the Financial Crisis The effects of the 2007/08 financial crisis continue to be felt today. This paper therefore attempts to highlight the meaning and effects of a financial crisis and some of the remedies that were taken to address it. In order to understand the financial crisis, the ideas of contagion and globalization are examined in relation to their overall contribution to the crisis and solutions. The concept of contagion highlights the effects of the financial crisis and how it managed to affect many countries. In times of a crisis, shocks are usually transmitted across markets. This concept is well captured in the article by Rudiger Dornbusch, Yung Chul Park and Stijn Claessens (2000) where the authors identify some of the risk factors that expose certain countries to contagion. This explains why many countries continue to feel the effects of the 2007/8 financial crisis. In the modern global economy, the financial and economic performance of one country is affected by events taking place in other countries. Therefore, understanding the financial crisis phenomena is of great importance in the modern economy. In this paper, the origins of the 2007/08 financial crisis will be examined based on the articles by Adrian Blundell-Wignall and Paul Atkinson (2009), and that by Markowitz Harry (2009). This will help highlight some of the causal factors behind the financial crisis and how such can be avoided in future. In addition, in order to understand how a financial crisis affects a given economy, the paper will use the article by Matthieu Bussier et al (2013), on the impact of the financial crisis. Through this article, this paper will attempt to show that a financial crisis can cause devastating effects on a country’s economy, and this may spill to other regions as well.
Furthermore, one of the pressing issues associated with globalization is the ability of international institutions to reduce financial instability around the world. For example, in the article by Kenneth Rogoff (1999) discussed in class, the importance of international institutions in promoting global financial stability is examined. The three articles selected for this research paper will help evaluate how the various international institutions helped or failed to reduce the devastating effects of the financial crisis. Using the articles by Adrian Blundell-Wignall and Paul Atkinson (2009); Markowitz Harry (2009) ; and Matthieu Bussiere et al (2013), the solutions to the 2007/08 financial crisis will be explored. The role of international institutions will be examined.
Suggested class reading: Hoshi, Takeo, and Anil K. Kashyap. "Japans Financial Crisis and Economic Stagnation." Journal of Economic Perspectives, (2004) 18(1): 3-26. Web < http://www.researchgate.net/profile/Takeo_Hoshi/publication/4981697_Japan%27s_Financial_Crisis_and_Economic_Stagnation/links/02bfe50d090b54e3f1000000 >
As a class reading, the article by Takeo Hoshi and Kashyap Anil (2004), the effects of the Japan’s financial crisis are highlighted. By reading through this article as a class, practical effects of a financial crisis based on the experience of Japan will be explored. This will provide the necessary background information in understanding a financial crisis.
References for the Paper
Blundell-Wignall, Adrian and Atkinson, Paul. “Origins of the financial crisis and requirements for Reform.” Journal of Asian Economics, (2009) 20(5): 536–548 web
Bussiere, Matthieu et al . “The Financial Crisis: Lessons for International Macroeconomics.” American Economic Journal: Macroeconomics 2013, 5(3): 75–84. Web < http://www.robertkollmann.com/KOLLMANN_PUBL_BUSSIERE_IMBS_RANCI ERE_AEJ_MACRO_2013.pdf >
Markowitz, Harry. “Proposals Concerning the Current Financial Crisis.” Financial Analysts Journal, (2009) 65(1): 25-27 web < http://www.cfapubs.org/doi/pdf/10.2469/faj.v65.n1.4 >