scholarly journals PROSPERITY FOR ALL: AN ASSESSMENT OF THE “FARMERIAN” REMEDIES TO PREVENT FINANCIAL CRISES AND REDUCE UNEMPLOYMENT

2017 ◽  
Vol 23 (3) ◽  
pp. 1287-1293
Author(s):  
Marco Guerrazzi
Keyword(s):  
Great Recession ◽  
Financial Crises ◽  
Research Agenda ◽  
New Keynesian ◽  
Recent Book ◽  
Policy Issues ◽  
The Great Recession

In a recent book, Roger Farmer offers a quick but exhaustive rundown of the research agenda that he drove forward over the last 10 years with the aim to offer a novel microfoundation for Keynesian macroeconomics and—as a by-product—providing practical remedies to prevent financial crises, reduce unemployment, and ensure prosperity for all. In that work, the Farmerian arguments question the conventional visions underlying the Neo-Classical and New Keynesian paradigms and the addressed topics cover relevant theoretical, empirical, and policy issues that have been widely debated after the Great Recession of 2007–2009.

scholarly journals ENTREPRENEURS, FINANCIERS, AND BOOM–BUST CYCLES

2016 ◽  
Vol 21 (3) ◽  
pp. 785-816 ◽  
Author(s):  
Takuma Kunieda ◽  
Akihisa Shibata
Keyword(s):  
Great Recession ◽  
Productivity Growth ◽  
Financial Crises ◽  
High Growth ◽  
Factor Productivity ◽  
Business Cycle Theory ◽  
The Great Recession ◽  
Dynamic General Equilibrium Model ◽  
Parameter Values ◽  
Financial Market Imperfections

In this paper, a dynamic general equilibrium model with infinitely lived entrepreneurs and financiers is developed to investigate a possible mechanism that explains business cycles and financial crises. The highest growth rate is achievable only if financiers coexist with entrepreneurs, given a certain extent of financial market imperfections. However, if financiers coexist with entrepreneurs, the economy is highly likely to face a financial crisis at certain parameter values. These two-sided implications of the coexistence of entrepreneurs and financiers explain why both instability and high growth are frequently observed in modern economies. Furthermore, our model can obtain countercyclical movements in total factor productivity growth that cannot be explained by the standard real business cycle theory but were observed in the Great Recession of 2007–2008.

scholarly journals Inflation in the Great Recession and New Keynesian Models

2014 ◽  
Author(s):  
Marco Del Negro ◽  
Marc Giannoni ◽  
Frank Schorfheide
Keyword(s):  
Great Recession ◽  
New Keynesian ◽  
The Great Recession ◽  
New Keynesian Models

scholarly journals The Aggregate Implications of Regional Business Cycles

Econometrica ◽  
2019 ◽  
Vol 87 (6) ◽  
pp. 1789-1833 ◽  
Author(s):  
Martin Beraja ◽  
Erik Hurst ◽  
Juan Ospina
Keyword(s):  
Business Cycles ◽  
Great Recession ◽  
Aggregate Demand ◽  
Strong Relationship ◽  
Aggregate Data ◽  
New Keynesian ◽  
Aggregate Fluctuations ◽  
Wage Dynamics ◽  
The Great Recession ◽  
Wage Stickiness

Making inferences about aggregate business cycles from regional variation alone is difficult because of economic channels and shocks that differ between regional and aggregate economies. However, we argue that regional business cycles contain valuable information that can help discipline models of aggregate fluctuations. We begin by documenting a strong relationship across U.S. states between local employment and wage growth during the Great Recession. This relationship is much weaker in U.S. aggregates. Then, we present a methodology that combines such regional and aggregate data in order to estimate a medium‐scale New Keynesian DSGE model. We find that aggregate demand shocks were important drivers of aggregate employment during the Great Recession, but the wage stickiness necessary for them to account for the slow employment recovery and the modest fall in aggregate wages is inconsistent with the flexibility of wages we observe across U.S. states. Finally, we show that our methodology yields different conclusions about the causes of aggregate employment and wage dynamics between 2007 and 2014 than either estimating our model with aggregate data alone or performing back‐of‐the‐envelope calculations that directly extrapolate from well‐identified regional elasticities.

scholarly journals Hall of Mirrors: The Great Depression, the Great Recession, and the Uses—and Misuses—of History

2015 ◽  
Vol 89 (3) ◽  
pp. 557-569 ◽  
Author(s):  
Per H. Hansen
Keyword(s):  
United States ◽  
Great Depression ◽  
Great Recession ◽  
Financial Crises ◽  
The United States ◽  
Comparative Approach ◽  
The Great Recession ◽  
The Great Depression ◽  
Successful Search ◽  
Similarities And Differences

Barry Eichengreen's new bookHall of Mirrorsis a detailed, excellent, and somewhat pessimistic comparison of the two most serious financial crises ever—their causes, development, and consequences. Readers well versed in the comprehensive literature on the Great Depression and the Great Recession in the United States and Europe will not find much information inHall of Mirrorsthat is completely new, but most others will. Whatisnew is the comparative approach: the detailed and analytically successful search for similarities and differences between the Great Depression and the Great Recession.

scholarly journals Capital Adequacy and Liquidity of Global Financial Institutions: A Study of Reforms after the Great Recession

2019 ◽  
Vol 5 (4) ◽  
pp. p419
Author(s):  
Mehdi Monadjemi ◽  
John Lodewijks
Keyword(s):  
Financial Institutions ◽  
Great Recession ◽  
Federal Reserve ◽  
Financial Crises ◽  
Central Banks ◽  
Capital Adequacy ◽  
Federal Reserve Bank ◽  
The Great Recession ◽  
The Great Depression ◽  
Reserve Bank

The global financial crises of 2007-2009 was followed by the Great Recession which was the worst since the Great Depression of 1930s. The crises left significant adverse effects on global growth and employment. Policymakers of affected countries responded differently to the outcomes of these crises. The central banks, including US Federal Reserve Bank and Bank of England, provided ample liquidity for the financial institutions and lowered the interest rate to near zero. The policymakers and regulators realized that capital inadequacy and insufficient liquidity of financial institutions were the main problems preventing the financial firms to protect themselves against major financial crises. In addition, lack of guidelines for compensations encourages managers to take the extra risks. The US Federal Reserve Bank took the initiative, in cooperation with international central banks to introduce rules and regulations to safeguard the financial systems against another major crisis. It is not guaranteed that another episode of financial instability will not happen again. However, with existing regulations on financial institutions in force, the severity of the crises on the whole global financial system may possibly become weaker. This is a conjecture we explore here.

Does Economic and Political Integration Undermine Representative Democracy?

2020 ◽  
pp. 636-654
Author(s):  
Jorge M. Fernandes ◽  
Pedro C. Magalhães
Keyword(s):  
Economic Policy ◽  
Great Recession ◽  
Representative Democracy ◽  
Political Integration ◽  
Eurozone Crisis ◽  
Policy Issues ◽  
The Great Recession ◽  
Policy Responses ◽  
Citizen Preferences ◽  
Actual Policy

The Great Recession and the Eurozone crisis are frequently treated as having led to a breakdown in democratic representation in Europe, as deeply constrained governments became unable to translate the preferences of citizenry into actual policy. However, after reviewing the available evidence, we find that the crisis seems to have contributed to increasing both the salience of economic policy issues and the ideological differentiation around them, amongst both parties and voters. Furthermore, the composition of governments remained relevant for the policy responses to the crisis, even among those countries that were most deeply affected. To be sure, the picture regarding the extent to which governments remained responsive to changing citizen preferences remains very incomplete. However, the existing evidence warns against underestimating the resilience of the mechanisms that contribute to keep re-election-minded officials in line with the preferences of citizens, even in what concerns supranational policymaking.

In the current stream

2021 ◽  
pp. 309-345
Author(s):  
Michael Peneder ◽  
Andreas Resch
Keyword(s):  
Economic Theory ◽  
Venture Capital ◽  
Central Bank ◽  
Great Recession ◽  
Economic History ◽  
Financial Crises ◽  
The Great Recession ◽  
Hyman Minsky ◽  
Intellectual Environment

While the previous chapter highlighted the resurgence of Schumpeter’s concept of money in economic theory, this chapter focuses on three examples from recent economic history in which the interdependence of finance and innovation invokes a deliberate Schumpeterian interpretation. The first example is about the striking rise of modern venture capital in Schumpeter’s immediate geographical and intellectual environment during his years at Harvard, to which he contributed a consistent intellectual frame (also through his personal ties with people like David Rockefeller, Frank Taussig, or George Doriot). The second example addresses the recurrent instances of financial crises, in particular the Great Recession of 2008-09, and invokes a Schumpeterian interpretation mainly via the instability theorem of his student Hyman Minsky. Finally, we turn to the stream of innovations that relate to the increasing digitalisation of money ranging from cryptocoins to central bank digital currencies (CBDC).

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