This paper models the global financial crisis as a combination of shocks to global housing markets and sharp increases in risk premia of firms, households and international investors in a global economic model. The model has six sectors of production and trade in 15 major economies and regions....

Despite the current recession in many parts of the OECD, fiscal consolidation is likely in many OECD economies in the 1990s. The author asks: is fiscal consolidation in the OECD in a period of low growth a recipe for global stagnation? In particular, what effects are likely in developing...