National Institute Economic Review articles from October 2008

National Institute Economic Review archives from October 2008

Introduction: the great crash of 2008.
October 1, 2008... In March 2008 we decided to commission a special issue of the Review on Financial Crises in the hope that the topic would still be of interest. Unfortunately it is of more interest now than then. There are six articles in the Review on the...

The evolution of the financial crisis of 2007-8.
October 1, 2008... Introduction Although financial crises such as that currently underway tend to be seen as surprising and unusual when they occur, in fact they are common events, particularly in the period since 1970. For example, Demirguc Kunt and...

Risk management and the costs of the banking crisis.
October 1, 2008... The 2007-8 banking crisis in the advanced economies has exposed deficiencies in risk management and prudential regulation approaches that rely too heavily on mechanical, albeit sophisticated, risk management models. These have aggravated...

Should monetary policy respond to asset price bubbles? Revisiting the debate.
October 1, 2008... Recent events have highlighted the importance of asset prices to central bank decisions. We argue that, in response to asset price bubbles, central banks should 'lean against the wind' (LATW hereafter). Even if the bubbles themselves are not...

Could early warning systems have helped to predict the sub-prime crisis?
October 1, 2008... One of the features of the sub-prime crisis, that began in August 2007, was its unexpected nature. It came as a surprise not only to most financial market participants but also in some degree to the policy community. In this context, we seek to...

The boundary problem in financial regulation.
October 1, 2008... The current financial crisis has raised queries about the adequacy of the present regulatory regime. Whilst the immediate priority may be to plug the obvious holes in the system, there are some long-term generic problems with almost any system...

Financial crises, regulation and growth.
October 1, 2008... The paper discusses the effects on growth of a systemic banking crisis as a result of debt defaults. These effects will come from the impact of credit rationing on consumption and credit and from the impacts of a significant rise in the spread...

The world economy.(AT A GLANCE ...)
October 1, 2008... This autumn's banking panic will take a severe toll on world growth especially in developed economies. GDP growth in the OECD group of mainly rich countries will slow to 0.4 per cent in 2009, the weakest since 1982. Among the G7, the American...

The UK economy.(Economic overview)
October 1, 2008... * The economy will contract in the second half of 2008 and GDP will fall by 0.9 per cent in 2009, the first full-year recession since 1991. * Consumer spending will decline by 3.4 per cent next year. * The other main factor dragging the...

Commentary: the policy framework.
October 1, 2008... The Government, when it came to power in 1997, adopted a monetary and fiscal policy framework which was intended to deliver low and stable inflation, high and stable economic growth and fiscal balance as a basis for fairness between...

Decomposing the global recession.(THE WORLD ECONOMY)
October 1, 2008... Over the past few weeks, the global financial system has appeared on the brink of collapse, as mounting bank losses and a lack of banking liquidity have resulted in a wave of collapsing financial institutions across Europe and the US. While the...

Exchange rate realignments and risks of deflation in North America.(THE WORLD ECONOMY)
October 1, 2008... United States The US dollar has strengthened in recent months against most major currencies, with the exception of the yen. It has also gained strength against emerging market currencies, and the US effective exchange rate has appreciated...

Exchange rates and inflationary prospects in Asia.(THE WORLD ECONOMY)(Statistical data)
October 1, 2008... We are forecasting what might be called a global recession in 2009, since this is commonly defined as world growth (calculated at purchasing power parity weights) of less than 3 per cent per annum. However, relative to previous global...

The impact of the financial crisis on the Euro Area.(THE WORLD ECONOMY)(Statistical data)
October 1, 2008... This year should see a sharp downturn in the Euro Area's economic growth. After peaking at 2.6 per cent in 2007, real GDP growth is projected to slow down to around 1 1/4 per cent this year and fall to about 1/4 per cent in 2009. We expect GDP...

Prospects for the UK economy.
October 1, 2008... The production of this forecast is supported by the Institute's Corporate Members: Abbey plc, Bank of England, Barclays Bank plc, HM Treasury, Nomura Research Institute Europe Ltd, and the Office for National Statistics. Introduction ...