Dr. Mark Ellyne UCT Summer School 2012. South Africa In A Changing World : Current World Economic Trends And Crises . Lecture Outline. Some general world trends of the last 30 years Economic transmission of crises International imbalances The Sub-Prime financial crisis
Dr. Mark Ellyne
UCT Summer School 2012
South Africa In A Changing World:Current World Economic Trends And Crises
Reinhart and Rogoff, This Time Is Different
“... financial crises are nothing new.”
“There have been at least 250 sovereign default episodes during 1800-2009”
“ Today’s emerging market countries did not invent ... repeated sovereign defaults. Rather, a number of today’s now-wealthy countries had similar problems when they were emerging markets.”
How are shocks transmitted internationally?
Interest rate is key mechanism for
international economic transmission
(and vice versa: Surplus→ Creditor)
[Surplus → Currency appreciates]
What to do?
What to do