Define the term “secular stagnation” used in economics and finance
The Root Cause of the Recent Global Liquidity Crisis Instructions: Please read at least twice each of the seven (9) Financial Times (FT) articles, the FT book review and the FT editorial found below relating to different aspects of the 2007-2009 Great Recession. Subsequent to this, each student must answer questions about the readings found below. Choose only one group of questions to answer for this writing assignment: either Group One (Questions 01 and 02) below or Group Two (Question 03) below; 01. Define the term “secular stagnation” used in economics and finance. 02. What was the root cause of the liquidity crisis according to Atif Mian and Amir Sufi in their recently published book House of Debt? Place the substance of Mian and Sufi’s analysis in the template provided by Hyman Minsky’s Model of a General Financial Crisis, viz., in terms of the four stages (Minsky phases) of the business cycle resulting in a financial crisis. As a monetary policy how has Quantitative Easing (QE) been an ‘unconventional tool’? 03. Famed columnist Gillian Tett of the FT in the fourth article below asserts the implosion of shadow banking is “the real culprit unleashing financial disaster.” What empirical evidence does she adduce in the three articles to back up her hypothesis? How does the Quantity Theory of Money have application in Tett’s analysis? How does Gottfied Haberler’s necessary and sufficiency conditions complement Tett’s analysis? How many loans on risky assets with minimum collateral did Freddie Mac and Fannie Mae write in the boom leading up to the crisis? Place the substance of Tett’s (and Roubini’s) analysis in the template provided by Hyman Minsky’s Model of a General Financial Crisis, viz., in terms of the four stages (Minsky phases) of the business cycle resulting in a financial crisis. Has Quantitative Easing (QE) worked? A student should strive for thoroughness, preciseness (accuracy) and conciseness (brevity of written expression) in his/her exposition.
