Economic bubble

From the beginning of the early 2000's some major causes that presume to have the major effects on the great recession was fundamental flaws that created growth and contraction. When the economy goes down , the federal reserve can set interest rates lower creating money cheaper for people to take out loans from banks at anytime in exchange to 20-30 year commitment mortgages. This allow Americans to buy households ,make business investments and others that meant more production and more…

The comparison between the neoclassical economics advocated by Kenneth Arrow and information economics by George Stigler show the different point of view towards the function of market and the economical mechanism to fix the market failure and improve the economic performance and social welfare. The two points of views differs mainly on whether the government should way in when the economy is facing trouble and need to resolve some market failures that are currently affecting the well-being of…

Introduction Inflation is defined as the sustained increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer buys fewer goods and services. Accordingly, inflation reflects a drop in the purchase power per unit of money, a loss of real value in the medium of exchange and unit of account within the economy. A major measure of price inflation is the inflation rate, the annualised percentage…

It is said that he was paid almost $135,000 by the Icelandic Chamber of Commerce to write the report. Similarly many top B school Economics Professors are being paid millions by corporate America both to advise and to sit on their boards. 2. Role of the Government- Corruption and Questionable Appointments Alan Greenspan, the economist who later became the chief of the Federal Reserve…

Also, the effect of global financial crisis in some of the China’s trading partners such as EU, South Korea and Japan which caused the demand for China’s export decreased. Also, problem of the housing bubble in China. The implications of the slowdown in China’s economic growth has spread over the world economy. It effects on the U.S. economy. This is because of China is U.S. second largest trading partner also the largest holder of U.S. debt. Besides, as demand from China decreased…

Kindleberger’s theory for the development of speculative manias. This economic theory claims that first displacement occurs in the form of an exciting new investment opportunity, positive feedback quickly ensues resulting in a euphoria, new risky financial products are created, corruption takes place, and then, finally, the corruption is exposed and expectations are not met resulting in a market crash. Chancellor then goes on to supplement this economic model with both a social and a political…

Introduction Moet Hennessy – Louis Vuitton better Known as LVMH is the worlds largest luxury goods group. LVMH control more than 60 brands External Environmental Analysis Pestle Analysis Political factors Political decisions have a great influence on the world of watches. The latest decision by the Swiss central bank to freely quote the currency and the geopolitical tensions increase the problems for watch manufacturers in the Swiss country. The decision to end the minimum parity between…

Raghuram Rajan’s book “Fault Lines: How Hidden Fractures Still Threaten the World Economy” provides an in-depth view of the forces that brought about the worst financial and economic crisis in at least half a century and look at what can be done to prevent the next one. Rajan argues that the reasons for the crisis are more complicated than just blaming one single stakeholder (e.g., financial professionals, regulators, government officials), rather, there are serious flaws in the economy. Each…

either failed to learn some very important lessons from the 1920’s or that we ignored them in the 2000’s. Programs that are the legacy of the Great Depression prevented the 2008-2009 economic collapse from reaching the dimensions of the 1930’s economic implosion in the U.S. However, failure…

investor community about the economy. This may occur due to several reasons like reasonable interest rates with good economic health indicators like low unemployment. There is an overall optimism about the economy and this causes more demand than supply for securities. This keeps pushing the prices of securities higher. Eventually there occurs euphoria of buying leading to pricing bubbles which…