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
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