Ansgar Belke - Böcker

The Great Financial Crisis, which started in 2007-08, was originally called the ‘sub-prime’ crisis because its origins could be traced to excessive lending in the real estate sector in the US, concentrated mostly in sunbelt states like Nevada, Florida and California. There were similar pockets of excess lending for housing in Europe, notably in Ireland and Spain. But a key difference emerged later: in Ireland and Spain, the local banking systems almost collapsed and the governments experienced severe financial stress with large macroeconomic costs. Nothing similar happened in the US. The local financial system remained fully functional and the local governments did not experience increased financial stress in the states with the biggest real estate booms, like Nevada or Florida. This book illustrates how the structure of the US banking market and the existence of federal institutions allowed regional financial shocks to be absorbed at the federal level in the US, thus avoiding local financial crisis. The authors argue that the experience of the US shows the importance of a ‘banking union’ to avoid severe regional (national) financial dislocation in the wake of regional boom and bust cycles. They also discuss the extent to which the institutions of the partial banking union, now in the process of being created for the euro area, should be able to increase its capacity to deal with future regional boom and bust cycles, thereby stabilising the single currency.

The Great Financial Crisis, which started in 2007-08, was originally called the ‘sub-prime’ crisis because its origins could be traced to excessive lending in the real estate sector in the US, concentrated mostly in sunbelt states like Nevada, Florida and California. There were similar pockets of excess lending for housing in Europe, notably in Ireland and Spain. But a key difference emerged later: in Ireland and Spain, the local banking systems almost collapsed and the governments experienced severe financial stress with large macroeconomic costs. Nothing similar happened in the US. The local financial system remained fully functional and the local governments did not experience increased financial stress in the states with the biggest real estate booms, like Nevada or Florida. This book illustrates how the structure of the US banking market and the existence of federal institutions allowed regional financial shocks to be absorbed at the federal level in the US, thus avoiding local financial crisis. The authors argue that the experience of the US shows the importance of a ‘banking union’ to avoid severe regional (national) financial dislocation in the wake of regional boom and bust cycles. They also discuss the extent to which the institutions of the partial banking union, now in the process of being created for the euro area, should be able to increase its capacity to deal with future regional boom and bust cycles, thereby stabilising the single currency.

An old song has it that money makes the world go round. Indeed, money, the universallyacceptedmeansofexchange,playsapivotalrolein turningthe wheelsof an increasinglyglobalizedworldeconomy,characterisedby increasingcross-border trade in goods and services and nancial transactions. Given the undeniable imp- tance of money for domestic and international economic dispositions, we therefore do not heed the old saying The best advice aboutmoney is not to talk aboutit in this book. On the contrary, we will talk about money quite extensively. At the time of writing, the global monetary architecture experiences an unpre- dented credit market turmoil, which started in the US subprime mortgage market in July/August 2007 and spread to virtually all major nancial markets. The ultimate consequencesofthis nancialearthquakeare hardto predictin termsof theirimpact on the global economy and its monetary order in the years to come. Nevertheless, throughoutour book the reader will nd plenty of analyses of the factors and events which may have sown the seeds of the current crisis.With this book we want to provide students with an integrated overview about themajor buildingblocksof monetaryeconomics- that are monetarytheory,capital market theory and monetary policy theory. In doing so, we will draw heavily on the work of many leading scholars. On top of that, we will provide numerous graphs and econometric examples, which may help illustrating, and thereby improving the understanding of, the theoretical issues under review.

An old song has it that money makes the world go round. Indeed, money, the universallyacceptedmeansofexchange,playsapivotalrolein turningthe wheelsof an increasinglyglobalizedworldeconomy,characterisedby increasingcross-border trade in goods and services and nancial transactions. Given the undeniable imp- tance of money for domestic and international economic dispositions, we therefore do not heed the old saying The best advice aboutmoney is not to talk aboutit in this book. On the contrary, we will talk about money quite extensively. At the time of writing, the global monetary architecture experiences an unpre- dented credit market turmoil, which started in the US subprime mortgage market in July/August 2007 and spread to virtually all major nancial markets. The ultimate consequencesofthis nancialearthquakeare hardto predictin termsof theirimpact on the global economy and its monetary order in the years to come. Nevertheless, throughoutour book the reader will nd plenty of analyses of the factors and events which may have sown the seeds of the current crisis.With this book we want to provide students with an integrated overview about themajor buildingblocksof monetaryeconomics- that are monetarytheory,capital market theory and monetary policy theory. In doing so, we will draw heavily on the work of many leading scholars. On top of that, we will provide numerous graphs and econometric examples, which may help illustrating, and thereby improving the understanding of, the theoretical issues under review.