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    (Original post by banterr)
    explaining the US recession in just a paragraph or two will not do it justice. if you want to gain a true insight into how the recession occurred the best way is to read a book. i strongly recommend 'End this Depression Now' by Paul Krugman as it also gives some ideas on how to fix it (much more relevant in terms of the present)
    I really have to try summarise it in a paragraph. I'm reading Freefall by Stiglitz and thats where I've got my summary from so far but it doesn't explain it very well or at least its pretty difficult to understand.
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    (Original post by KD35)
    I really have to try summarise it in a paragraph. I'm reading Freefall by Stiglitz and thats where I've got my summary from so far but it doesn't explain it very well or at least its pretty difficult to understand.
    OK well basically the laws on financial deregulation meant that banks were giving out loans with high yields, but high risk, due to the profitability of it. This risk taking meant that people were not able to pay off their loans (including mortgages). As a result the banks became financially weak and were unwilling to give out loans - hence the credit crunch. The lack of unavailable credit caused demand for housing to decline so due to free market forces the price of houses fell. This was a problem for consumers as they went underwater on their debt (their mortgage was more than the actual value of the house). This combined with the failure of the banks caused the recession.

    Sorry for the bad English but it's late and I'm tired
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    Hi there, I am an economics tutor and at the moment I am enjoying the summer break. However, I would be happy to answer questions, get involved in debate on anything economics related.

    Message me.

    Ali
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    (Original post by banterr)
    OK well basically the laws on financial deregulation meant that banks were giving out loans with high yields, but high risk, due to the profitability of it. This risk taking meant that people were not able to pay off their loans (including mortgages). As a result the banks became financially weak and were unwilling to give out loans - hence the credit crunch. The lack of unavailable credit caused demand for housing to decline so due to free market forces the price of houses fell. This was a problem for consumers as they went underwater on their debt (their mortgage was more than the actual value of the house). This combined with the failure of the banks caused the recession.

    Sorry for the bad English but it's late and I'm tired
    Thanks, I more or less had it :P. Your at university I'm presuming?
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    (Original post by KD35)
    Thanks, I more or less had it :P. Your at university I'm presuming?
    nope haha, i am a 2013 applicant hoping to go to uni :P
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    (Original post by banterr)
    nope haha, i am a 2013 applicant hoping to go to uni :P
    Lol so am I!! What unis are you thinking of applying to?

    And one more thing, what caused the sudden era of people not being able to repay their loans, was it the interest rate?
    And did the tightening of credit cause low demand that caused unemployment?
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    (Original post by KD35)
    Lol so am I!! What unis are you thinking of applying to?

    And one more thing, what caused the sudden era of people not being able to repay their loans, was it the interest rate?
    And did the tightening of credit cause low demand that caused unemployment?
    i 0% percent interest was designed to help people pay off their loans - the problem was that it wasn't enough. the bank made loans which were folly to people who couldnt pay them back. when house prices started to decline this had a knock on effect and more and more people were unable to pay off their loans.

    i am applying to:
    oxford PPE
    LSE politics and economics
    warwick PPE
    durham PPE
    york PPE

    yourself?
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    (Original post by artemis959)
    Hi there, I am an economics tutor and at the moment I am enjoying the summer break. However, I would be happy to answer questions, get involved in debate on anything economics related.

    Message me.

    Ali
    don't be shy, post here so the everyone can benefit from your great learning!
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    Anybody want to help out with some of the threads I've made that have had no love?

    http://www.thestudentroom.co.uk/show....php?t=2072736
    http://www.thestudentroom.co.uk/show....php?t=2070198

    Thanks guys
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    Hi,

    I'm in the process of answering the following essay question (2000 words):

    Identify some key differences between the ‘embedded liberalism’ that dominated global economic governance during the 1950’s and 60’s, and the ‘neo-liberalism’ which informed global economic governance since the 1980’s.

    So far my focus lies on explaining the characteristics of the Bretton Woods era and will then compare it to neoliberal policies...

    My question now is:
    Spero & Hart (2010) state that under fixed exchange rates financial interdependence affects national policies, eg. Interest rates lost effectiveness: low interest rates that should stimulate the economy lead to an outflow of capital and high rates used to manage inflation would attract foreign capital into the country.

    Could someone have pity on me and explain this concept to me, it really makes no sense to me.

    Other suggestions on how to answer the essay question are also welcome.

    thanks!
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    (Original post by la_salchicha)
    My question now is:
    Spero & Hart (2010) state that under fixed exchange rates financial interdependence affects national policies, eg. Interest rates lost effectiveness: low interest rates that should stimulate the economy lead to an outflow of capital and high rates used to manage inflation would attract foreign capital into the country.

    Could someone have pity on me and explain this concept to me, it really makes no sense to me.
    As far as I can see, this part is simply saying how countries lose their monetary independence by joining a fixed exchange rate (and having free movement of capital).
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    Thanks a lot JBMJBM for the fast reply and great explanation!
    cheers also for the link alex!
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    Question : Make simaltanous model equation model of any industy/sector or market .. layout estimation strategies, tell how to estimate it .conditions to take care for estimation ...

    Please reply
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    Hello everyone.

    Although Lagrange has been ok for me im struggling with a certain question.

    Pefrences over two goods : u(x1,x2) = 7x ^3/7 x2 ^4/7. Subject to P1x1 + P2x2 = M

    I have the answers from the lecturr but have no idea how to find them.

    Could someone please help?

    Thanks
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    (Original post by barmy_army)
    Hello everyone.

    Although Lagrange has been ok for me im struggling with a certain question.

    Pefrences over two goods : u(x1,x2) = 7x ^3/7 x2 ^4/7. Subject to P1x1 + P2x2 = M

    I have the answers from the lecturr but have no idea how to find them.

    Could someone please help?

    Thanks
    Read:
    http://amber.feld.cvut.cz/bio/konopka/file/5.pdf

    or:
    http://www.wfu.edu/~baxley/m254book.pdf
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    (Original post by the.cookie.monster)
    I'm doing my EPQ and I'm really struggling to find reliable data sources on China which provides data for consecutive years- anyone know any good sources? Thank you!
    I'm not sure if there is such a thing as reliable data for China but have you tried the standard IMF/World Bank/etc.?
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    (Original post by the.cookie.monster)
    I'm doing my EPQ and I'm really struggling to find reliable data sources on China which provides data for consecutive years- anyone know any good sources? Thank you!
    Have you got access to datastream, I found this was very useful in get reliable and lengthy data, your local uni may have access to it and it has a massive database. I would give that a go.
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    Will i be able to do economics in university without doing maths in college?
    I'm currently doing A levels economics,psychology,business studies & philosophy
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    (Original post by CoolStoryBroo)
    Will i be able to do economics in university without doing maths in college?
    I'm currently doing A levels economics,psychology,business studies & philosophy
    It depends on the university - not all of them require you to have done Maths at A-level.
 
 
 
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