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Collapsing credit markets have been blamed for the depth and persistence of the Great Depression in the United States. Could similar mechanisms have played a role in ending the East Asian economic miracle - and in creating fragility in global financial markets? After a brief account of the...
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Introduction -- Efficient markets and central banks? -- Money, banks and central banks -- Stable and unstable markets -- Deceiving the diligent -- On (central bank) governors -- Minsky meets Mandelbrot -- Beyond the efficient market fallacy -- Concluding remarks
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underpricing of risk made possible by regulatory arbitrage and shadow financing fueled the credit and twin real estate bubbles of … the mid-2000s. Across countries and over time bubbles have been particularly acute in real estate markets reflecting not …
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system and its role in the real economy. The best examples of the causal link between excessive debt, asset bubbles, and …
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We provide a theory to investigate the implications of time-varying bailout policy for rational bubbles in an infinite …-horizon production economy. In particular, we ask two questions. First, should the government bail out asset bubbles? Second, if yes, how … bubbles are vulnerable to market sentiment and resource-consuming. The systematic risk of bubble bursting causes both asset …
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