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Financial Contagion
Financial contagion refers to "the spread of market disturbances mostly on the downside from one country to the other, a process observed through co-movements in exchange rates, stock prices, sovereign spreads, and capital flows". Financial contagion can be a potential risk for countries who are trying to integrate their financial system with international financial markets and institutions. It helps explain an economic crisis extending across neighboring countries, or even regions. Financial contagion happens at both the international level and the domestic level. At the domestic level, usually the failure of a domestic bank or financial intermediary triggers transmission when it defaults on interbank liabilities and sells assets in a fire sale, thereby undermining confidence in similar banks. An example of this phenomenon is the subsequent turmoil in the United States financial markets. International financial contagion, which happens in both advanced economies and developing ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Subprime Crisis Diagram - X1
In finance, subprime lending (also referred to as near-prime, subpar, non-prime, and second-chance lending) is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. Historically, subprime borrowers were defined as having FICO scores below 600, although this threshold has varied over time. These loans are characterized by higher interest rates, poor quality collateral, and less favorable terms in order to compensate for higher credit risk. Many subprime loans were packaged into mortgage-backed securities (MBS) and ultimately defaulted, contributing to the financial crisis of 2007–2008.Lemke, Lins and Picard, ''Mortgage-Backed Securities'', Chapter 3 (Thomson West, 2013 ed.). Defining subprime risk The term ''subprime'' refers to the credit quality of particular borrowers, who have weakened credit histories and a greater risk of loan default than prime borrowers. As people become economically active, records are c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
General Equilibrium Model
In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an overall general equilibrium. General equilibrium theory contrasts to the theory of ''partial'' equilibrium, which analyzes a specific part of an economy while its other factors are held constant. In general equilibrium, constant influences are considered to be noneconomic, therefore, resulting beyond the natural scope of economic analysis. The noneconomic influences is possible to be non-constant when the economic variables change, and the prediction accuracy may depend on the independence of the economic factors. General equilibrium theory both studies economies using the model of equilibrium pricing and seeks to determine in which circumstances the assumptions of general equilibrium will hold. The theory dates to the 1870s, particularly t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Long-Term Capital Management
Long-Term Capital Management L.P. (LTCM) was a highly-leveraged hedge fund. In 1998, it received a $3.6 billion bailout from a group of 14 banks, in a deal brokered and put together by the Federal Reserve Bank of New York. LTCM was founded in 1994 by John Meriwether, the former vice-chairman and head of bond trading at Salomon Brothers. Members of LTCM's board of directors included Myron Scholes and Robert C. Merton, who three years later in 1997 shared the Nobel Prize in Economics for having developed the Black–Scholes model of financial dynamics.''A financial History of the United States Volume II: 1970–2001'', Jerry W. Markham, Chapter 5: "Bank Consolidation", M. E. Sharpe, Inc., 2002 LTCM was initially successful, with annualized returns (after fees) of around 21% in its first year, 43% in its second year and 41% in its third year. However, in 1998 it lost $4.6 billion in less than four months due to a combination of high leverage and exposure to the 1997 Asian fina ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Contagion (other)
Contagion may refer to: Medicine * Contagious disease Social science * Emotional contagion, a tendency to feel others' emotions * Behavioral contagion, a tendency to mimic others' behavior * Law of contagion, a folk belief related to magical thinking * Financial contagion, a scenario in which financial shocks spread to other financial sectors * Hysterical contagion, an effect in which a group exhibits physical symptoms due to a psychological cause * Sacred contagion, the belief that spiritual properties pass from one entity to another * Complex contagion, a social networking phenomenon * Contagion heuristic, a psychological technique Film and television * ''Contagion'' (1987 film), directed by Karl Zwicky * ''Contagion'' (2002 film), featuring Bruce Boxleitner * ''Contagion'' (2011 film), directed by Steven Soderbergh * "Contagion" (''Star Trek: The Next Generation''), 1989 TV episode Music * ''Contagion'' (Oceano album), 2010 * "Contagion", a song by Black Dahlia Murde ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Google Books
Google Books (previously known as Google Book Search, Google Print, and by its code-name Project Ocean) is a service from Google Inc. that searches the full text of books and magazines that Google has scanned, converted to text using optical character recognition (OCR), and stored in its digital database.The basic Google book link is found at: https://books.google.com/ . The "advanced" interface allowing more specific searches is found at: https://books.google.com/advanced_book_search Books are provided either by publishers and authors through the Google Books Partner Program, or by Google's library partners through the Library Project. Additionally, Google has partnered with a number of magazine publishers to digitize their archives. The Publisher Program was first known as Google Print when it was introduced at the Frankfurt Book Fair in October 2004. The Google Books Library Project, which scans works in the collections of library partners and adds them to the digital inv ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Quarterly Journal Of Economics
''The Quarterly Journal of Economics'' is a peer-reviewed academic journal published by the Oxford University Press for the Harvard University Department of Economics. Its current editors-in-chief are Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer, and Stefanie Stantcheva. History It is the oldest professional journal of economics in the English language, and covers all aspects of the field—from the journal's traditional emphasis on micro-theory to both empirical and theoretical macroeconomics. Reception According to the '' Journal Citation Reports'', the journal has a 2015 impact factor of 6.662, ranking it first out of 347 journals in the category "Economics". It is generally regarded as one of the top 5 journals in economics, together with the American Economic Review, Econometrica, the Journal of Political Economy, and the Review of Economic Studies. Notable papers Some of the most influential and well-read papers in economics have been published in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Extraordinary Popular Delusions And The Madness Of Crowds
''Extraordinary Popular Delusions and the Madness of Crowds'' is an early study of crowd psychology by Scottish journalist Charles Mackay, first published in 1841 under the title ''Memoirs of Extraordinary Popular Delusions''. The book was published in three volumes: "National Delusions", "Peculiar Follies", and "Philosophical Delusions". Mackay was an accomplished teller of stories, though he wrote in a journalistic and somewhat sensational style. The subjects of Mackay's debunking include alchemy, crusades, duels, economic bubbles, fortune-telling, haunted houses, the Drummer of Tedworth, the influence of politics and religion on the shapes of beards and hair, magnetisers (influence of imagination in curing disease), murder through poisoning, prophecies, popular admiration of great thieves, popular follies of great cities, and relics. Present-day writers on economics, such as Michael Lewis and Andrew Tobias, laud the three chapters on economic bubbles. In later editio ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Information Asymmetry
In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which can sometimes cause the transactions to be inefficient, causing market failure in the worst case. Examples of this problem are adverse selection, moral hazard, and monopolies of knowledge. A common way to visualise information asymmetry is with a scale with one side being the seller and the other the buyer. When the seller has more or better information the transaction will more likely occur in the seller's favour ("the balance of power has shifted to the seller"). An example of this could be when a used car is sold, the seller is likely to have a much better understanding of the car's condition and hence its market value than the buyer, who can only estimate the market value based on the information provided by the seller and their ow ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Market Liquidity
In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the price at which an asset can be sold, and how quickly it can be sold. In a liquid market, the trade-off is mild: one can sell quickly without having to accept a significantly lower price. In a relatively illiquid market, an asset must be discounted in order to sell quickly. Money, or cash, is the most liquid asset because it can be exchanged for goods and services instantly at face value. Overview A liquid asset has some or all of the following features: It can be sold rapidly, with minimal loss of value, anytime within market hours. The essential characteristic of a liquid market is that there are always ready and willing buyers and sellers. It is similar to, but distinct from, market depth, which relates to the trade-off between qua ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Currency War
Currency war, also known as competitive devaluations, is a condition in international affairs where countries seek to gain a trade advantage over other countries by causing the exchange rate of their currency to fall in relation to other currencies. As the exchange rate of a country's currency falls, exports become more competitive in other countries, and imports into the country become more and more expensive. Both effects benefit the domestic industry, and thus employment, which receives a boost in demand from both domestic and foreign markets. However, the price increases for import goods (as well as in the cost of foreign travel) are unpopular as they harm citizens' purchasing power; and when all countries adopt a similar strategy, it can lead to a general decline in international trade, harming all countries. Historically, competitive devaluations have been rare as countries have generally preferred to maintain a high value for their currency. Countries have generally all ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Debt Crisis
Debt crisis is a situation in which a government (nation, state/province, county, or city etc.) loses the ability of paying back its governmental debt. When the expenditures of a government are more than its tax revenues for a prolonged period, the government may enter into a debt crisis. Various forms of governments finance their expenditures primarily by raising money through taxation. When tax revenues are insufficient, the government can make up the difference by issuing debt. A debt crisis can also refer to a general term for a proliferation of massive public debt relative to tax revenues, especially in reference to Latin American countries during the 1980s, the United States and the European Union since the mid-2000s, and the Chinese debt crises of 2015. Debt wall Hitting the debt wall is a dire financial situation that can occur when a nation depends on foreign debt and/or investment to subsidize their budget and then commercial deficits stop being the recipient of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Creditor
A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption (usually enforced by contract) that the second party will return an equivalent property and service. The second party is frequently called a debtor or borrower. The first party is called the creditor, which is the lender of property, service, or money. Creditors can be broadly divided into two categories: secured and unsecured. *A secured creditor has a security or charge over some or all of the debtor's assets, to provide reassurance (thus to ''secure'' him) of ultimate repayment of the debt owed to him. This could be by way of, for example, a mortgage, where the property represents the security. *An unsecured creditor does not have a charge over the debtor's assets. The term credito ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
