...Impact of the Asian Financial Crisis in 1997 and effect to Latin America Name: Institution: Date: Abstract In 1997, the Asian Financial Crisis spread rapidly all over the Asia and affected almost all the economies in the world. Prior to the Asian Financial Crisis, the Asian countries such as Thailand, Malaysia, South Korea, Indonesia, Hong Kong and Singapore experienced a remarkable growth in the economy that was considered the highest in the world. These Asian economies increased by a notable proportion of 6 to 10 percent annually in the GDP. However, what had been regarded as an Asian miracle seemed to crumple down rapidly 1997 when these Asian countries were faced with a severe financial crisis in their local stock and currency markets. When the economies started recovering from the crisis in 1998, the stock markets in several countries had considerably lost more than 70 percent of their worth, while their currencies depreciated in comparison to the US dollar (Pettis, 2001). The Asian Financial Crisis also affected several nations in the Latin America as they experienced a relentless economic meltdown that had detrimental effects to the economies. For instance, the financial crisis force multinational firms to close down due to liquidation, the banking system deteriorated and this forced high levels of lay-offs leading to unemployment. In addition, the financial crisis resulted in the loss of the people’s purchasing power in the Latin American while nations turned to...
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...Final Project Part One: Impact of Global Financial Crisis on Air Transport in the U.S Embry-Riddle Aeronautical University MBAA 522 – Business Research Methods For: Dr. Barry Bauer March 15, 2015 Introduction This research paper examines the origins of the 2008/2009 world financial crisis and the impact that the crisis had on air transport in the United States of America. Although the crisis originated in the economies of North America and Europe, its effects were global with particular serious implications for economies of the developing countries including my country, Zambia. The maximum blame of the crisis is pointed at the money lenders who created such problems as it is believed that it was the lenders in the developed nations who lent funds to people with poor credit and a high risk of default. Therefore, in an effort to address the crisis, the American Federal Reserve flooded the markets with increasing capital liquidity in order not only to lower interest rates but to also broadly depress risk premiums as investors sought riskier opportunities to bolster their investment returns (Craig, 2013). As we all know that aviation is one of the most important pillars of the global economy as it provides millions of jobs globally and contributes heavily in the global gross domestic products of a number of countries. To this effect, the aviation sector which is one of the fastest growing industries had to face negative growth rate while some aviation companies were...
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...Introduction: Does history really repeat itself? After reading the article on “Surviving A Debt Crisis: 5 Lessons for Europe from Latin America” by Samuel George from Bertelsmann Foundation, it seems very convincing that European leaders may have an opportunities to learn from the Latin American on how to handle and survive a debt crisis. The fundamental causes of these two debt crisis are highly similar. When the global economy was in good shape, massive lending was made to countries with unstable macroeconomic histories. Investors saw the lucrative opportunities to achieve high returns in some low-credibility nations but decided to take risks since there were no signs indicating any sort of recession. However, the second oil shock in 1979 led to spike in oil prices. As a result, the US went into recession, which drove commodities prices down significantly. Latin America countries import oil and export commodities, a deteriorated international trade situation slowed down their GDP growth. They were not able to pay for their loans which associated with floating interest rates. In 21st century European, the global financial crisis trigged a series of events. The Greek government had to spend heavily through debt to subsidize shipping and tourism industries which were harmed by the business cycle. Real-estate bubble in Spain and Ireland forced their governments to bailout private banks via national debts. It is, therefore, clear that in "sunny days", countries should...
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...“When the US sneezes, the world catches a cold” (Keating). The 2008 economic crisis didn’t occur suddenly. Signs started to appear in 2004, with the steadily increase in housing prices, when “subprime lending” was generally practiced. Subprime lending is the practice of lending loans to people who may have difficulty maintaining the repayment schedule which sometimes reflects setbacks, such as unemployment, divorce, medical emergencies, and more. Banks would usually lend out loans for an interest rate 100% or more for the values of their houses. Most realtors thought that the prices would have returned to a maintainable level, however, they failed to realize the amount of unreliable loaners (Amadeo). Many people began to lose their trust in the banks and their government, and started to criticizing the Community Reinvestment Act. The Community Reinvestment Act encourages citizens to put more of their money into banks in order to help surrounding communities grow (Community Reinvestment...
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...2008 Bank Bailout Economic crisis that strike a nation don’t happen from night to dawn, several factors attribute for an economic crisis to happen similar to a meltdown. This was the case for the 2008 economic crisis in America since the great depression that collapsed the stock market in 1929. Several are needed for a market to crash and crumble in pieces, risky investments, reckless decision making, and investments taking on a greater risks in hopes of greater returns are believed to be what caused the 2008 economic crisis in America. I believe that the bailout plan helped in the short term but will have its negative effects in the long run. The private sector in America especially the banks have a huge impact on the economy; there’s a lot of competition in that aspect of the economy. I believe that when the government intervenes in a free market economy and in the private sector it has to be with rules, regulations and under certain circumstances. The banks cannot just take risks loan money without checking first if the person can pay. For every act there is a consequence that has to be faced. The banks can’t just expect for the government to save them every time the feel they will go bankrupt. The government has stepped in several times since the beginning of 2008 to assist failing financial institutions. In September 2008, the federal government extended $85 billion to the American International Group, the country’s largest insurer and one of the world’s largest companies...
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...Critique Euro Crisis Fin 311 Certification of authorship “I certify that I am the author of this paper that any assistance I received in its preparation is fully acknowledged and disclosed herein. I have also cited any source from which I used data, ideas or words, either quoted directly or paraphrased. I also certify that this paper was prepared by my specifically for this course and is not a replication of a paper submitted for another course. ” Mateo Salazar Abstract The main question about this article that we must ask ourselves is that in what way or how does the European financial crisis affects us. In this article critique we are going to explore and find out how and why is this article relevant to the course and why did I choose it. This article by Martin Feldstein talks about the European economic crisis and how this crisis was foretold long time ago. It analysis the countries involved in this crisis and how did they got there in the first place and how each one is affected by this anomaly. The critique shows us what caused the crisis and what is being done to stop this economic crunch, we will also review what countries are involved, what caused the crisis, what solutions are presented and find out the larger implications and think why and how this will affects people in America. Lately every day seems to bring chaotic news about the way our economy is doing. However, the most shocking or the one that everybody is scared of, would be the Euro economic failure...
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...Heisenberg’s Uncertainty Principle and its Implications for Financial Institutions Submitted in Partial Fulfilment of Master of Business Administration By KARTIK CHANDRA CHATURVEDI Batch (2013-2015) University Roll No: S133F0010 December 2014 Under the guidance of NIDHI KAICKER SCHOOL OF BUSINESS, PUBLIC POLICY AND SOCIAL ENTREPRENEURSHIP AMBEDKAR UNIVERSITY DELH PAGE 1 CERTIFICATE This is to certify that I have successfully completed the project titled Heisenberg’s Uncertainty Principle and its Implications for Financial Institutions submitted in partial fulfilment of the requirements for the Degree of Master of Business Administration at the School of Business, Public Policy and Social Entrepreneurship, Ambedkar University Delhi. It is further certified that the submitted report is based on original research work carried out by me. The material obtained from secondary sources is duly acknowledged. [Student Signature] KARTIK ……………………………………………………………………………..CHANDRA ……………………………………………………………………………..CHATURVEDI Roll No S133F0010 Batch: 2013-15 [Dean Signature] Dean SBPPSE [Faculty Signature] Faculty Advisor PAGE 2 ACKNOWLEDGEMENT I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals in the organization and School of Business, Public Policy and Social Entrepreneurship, Ambedkar University, Delhi. I would like to extend my sincere thanks to all of them. I am highly...
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... | Executive Summary This report first analyzes the economy of Chile in terms of strengths, which are the abundance in natural resources, and the weakness of heavy reliance on copper. Then identified two severe threats the nation was facing in 1998: Asian financial crisis and current account deficit. The two threats interact with the characteristics of Chilean economy which lead to the risks of currency crisis and a economic slowdown. The second section then investigates Chile’s current policies on inflation, trade and exchange rate. In terms of inflation, the central bank uses tight monetary policy and controls on capital inflows such as Unremunerated Reserve Requirement. For trade, the country relies on entering free trade agreements. For foreign exchange policy, Chile maintains a crawling peg system but is increasing the trading band. Facing the current challenges, we recommend that Chile should focus first on solving the potential currency crisis, then the economic slowdown. To avoid a currency crisis, the central bank of Chile should continue the tight monetary policy by raising interest rate. This practice can stabilizes the domestic currency value, attracts international capital and increases domestic savings. Focus directly at reducing current account deficit, Chile should also...
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...As far as we know, there were more than five economic and financial crises during the recent 200 years. Society was suffering from such downturns, because each of them had its own characteristics and consequences which affected the whole economic world. In the next passages I would like to tell you about the history of financial crises and about the solutions made by governments and departments which helped to reduce the bad effects of it. Not a single year has gone by in the past two centuries where there was not a financial crisis somewhere in the world (see figure 1). Arguably, the world witnessed its first international financial crisis in 1825. The opening up of Latin America after the overthrow of the Spanish empire led to the opening up of international trade between England and the Latin American republics. The result was massive capital flows from London to finance infrastructure, mining and government spending. But once the capital outflows impinged on the Bank of England’s (BoE) gold reserves, the policy rate was raised, leading to a banking crisis. A sudden stop of capital flow from London resulted in banking panics in the US and currency crashes across Latin America. Figure 1: The history of financial crises Indeed, the crisis in 1825 marked the first of seven clusters of sovereign defaults in the period 1800 to 2010 In the first cluster of defaults, which happened during 1824-1834, 13 Latin...
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...the housing market in America, which is known as the Sub-prime mortgage crisis was determined to be the main cause of the great recession of 2007. This sub-prime mortgage crisis drastically affected millions of Americans as it increased unemployment, which led to an increase in poverty, thus prompting the government to respond. Mr. Claude Gerald, Retired Economics Lecturer at the Montserrat Community College, stated “The Financial Crisis of 2007 and 2008 in North America was the main cause of the recession.” He further mentioned that the year 2007 initiated an era of turmoil as the financial crisis in the United States housing market began, which led to one of the worse financial meltdowns since the great depression in 1929. Mr. Gerald explained that In the housing market, persons who wished to purchase a house but unfortunately have a credit score typically below 620 would have been issued Sub-prime mortgage loans, as they may not have been able to acquire finance otherwise considering that sufficient collateral and a healthy credit history is required. These mortgages however were affiliate with high interest rates due to the likelihood of lenders being unable to acquire repayments in full as these persons have a history of making late payments or dishonouring credit requirements. The issue of these mortgages ultimately backfired on financial institutions as homeowners defaulted their repayments (Gerald). Dr. David Barker, Professor of Economics in the Graduate School...
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...Chapter 6 “The Crisis of the Porfirian Political Economy” In Morelos • Sugar production dropped drastically from 52,230,155 kilo (1908-1909) to 48,531,600 kilos • Mexican producers were facing an American tariff and new growers in Cuba • Tried to compensate the loss by selling to Mexico city and “domestic consumptions” • Event in Morelos reflected the Mexican agriculture at the time period • There was famine going on in the center and northern parts of the country. Corn shipments were being delivered from other countries cause of the shortage. Some 200,000 tons was imported between 1907-1910 • 1908-1909 there was a drought and that is why there was a shortage of corn. It was mostly due to lack of proper irrigation • The governments wasn’t willing to fund enough money for proper irrigation and also because of not having the sufficient farming tools. This lead to the inevitable down fall of Mexican agriculture • Diaz government had a plan for irrigation but because of the peasant displacement in favor of cash crop, which they farmed on their land, lead to a shortage of crops. Irrigation and the favor cash crop with the drought and crops that were infested in the south and center lead to the famine. • Because of this drought of crops domestic companies started coming into Mexico. This didn’t make Mexican society happy • In Veracruz, foreigners held 95 percent of the city’s private property. Cost of living doubles between 1901-1911 • There...
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...Running head: CAUSE OF ECONOMIC CONDITIONS IN THE UNITED STATES AND THE UNETHICAL BUSINESS THAT LED TO IT Final Paper James Smith Hodges University GEB/PAD 6376 Dr. Forrer Week Due: 14 Due: 08/14/2011 Submitted: 08/10/2011 INTRODUCTION (Part 1) Why has the unemployment rate been above 12 percent for the last several years? Why have so many prior successful businesses closed in the last four years? Why have so many major corporations and publicly traded companies filed for bankruptcy? Why did a house that used to cost $200,000.00 just sell for $40,000.00? Why are foreclosures at the highest rate in US history? Maybe the question to ask is what has caused all of this? There are so many questions to be answered when it comes to the economic conditions in the United States. How did it get into the current condition? What were the signs of slipping into the crisis (economic indicators)? Whose actions were responsible? Was the responsible party also guilty of unethical behavior (big issue) or was it accidental. How long will it take for the economy to get back to being productive? In the past, America has been a very productive, successful country. There have been other recessions and a depression that have affected the U.S. but for some reason this current crisis was started by a completely different chain of events. What was the chain of events that triggered this...
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...that we live in. We must begin to investigate the true meaning of how our monetary and fiscal policy is supposed to work in our recessed economy. As expressed by the Occupy Wall Street protesters it is clear that greed has lead to our financial windfall. Leaving me to wonder do our elected officials really understand how our economics system works. Like the Occupy Wall Street protesters the American people have a wide range of complaints, demands, and goals. The American people along with cries around the world are tired of "the collapsing environment, labor standards, housing policy, government corruption, World Bank lending practices, unemployment, and the increasing wealth disparity of a poverty stricken nation"(Occupied America) Different people have been affected by different aspects of the same system; they believe that these were symptoms of the same core problem in the world’s financial crisis. In the mean time, prompting a dominos effect around the world which consisted of a demographic pool of young protesters do to the rise of unemployment. Leaving us to wonder why stiffer regulations haven’t been imposed on Wall Street and in corporate America. As we continue to...
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...Can innovation solve the economic crisis? Loh Hu 2/18/2013 In this paper, I examine how the theory of technological innovation waves could contribute to solving the ongoing economic crisis. Primarily, my stance remains that innovation in itself is insufficient to solve the economic crisis unless there exists a matching techno-economic paradigm where national, supranational and global efforts are coordinated for a full deployment of technological revolution. Can innovation solve the economic crisis? Background There has been a wide international debate on the causes and possible solutions to the economic crisis that emerged in 2007 – 2008 (Ranga and Etzkowitz 2012). The economic crisis sweeps across the global financial system rapidly and furiously as markets are globally integrated (Gore 2010). Hence, the responses to the global economic crisis are not only enclosed within a nation’s or a coalition government’s approach. Rather, a global coordinated response is warranted as well. Economic stimulus packages addressing short-term and long-term problems have been adopted in most countries as well as the European Commission (Ranga and Etzkowitz 2012). Internationally, the United States of America and European Union have recently been discussing on a free-trade agreement to remove trading barriers between the two important economic powers and boost the economies (BBC News Business 2013). Globally, the G-20 group of major economies have considered proposals on international...
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...reading this information, you may think it may be the status of a certain poor country. The particularly serious numbers show that country is experiencing many problems. I will tell you a secret that you can not have more surprise. The above information is situation of the country that has a most powerful economy all over the world. That is United State of America. The year 2008 marked the economic crisis which caused the USA severe damages. Many of the US financial institutions have suffered heavy losses due to the effect of this crisis. In addition, the crisis is increasingly spreading to the economies of some countries in Europe and in Japan... As a result, some powerful banks in these countries are also suffering from the impact of the crisis. The consequences of the crisis are not only observed in the dimensions of business operation and the economic growth rate and employment rate in the US, but also taken into consideration on the global impact on the shift of international investment capital flow in particular and the world’s economic growth in general. Therefore, it is really necessary to find out what creates this crisis in order to help other countries avoid it. My...
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