TAILIEUCHUNG - Review Of The Cost Of Capitalism Culture Lifestyle_2

Tham khảo tài liệu 'review of the cost of capitalism culture lifestyle_2', tài chính - ngân hàng, tài chính doanh nghiệp phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 6 The Cost OF Capitalism economy did not reduce wild Wall Street swings. In succession we witnessed the 1987 stock market crash the S L crisis of the early 1990s the Long-Term Capital Management meltdown and the spectacular technology boom and bust dynamic of the late nineties. In Asia we had two bouts of financial market mayhem Japan s early 1990 collapse see Figure which was followed a few years later by the panic that swept through much of the newly emerging Asian economies. As it turned out this daunting list of financial market upheavals were simply dress rehearsals for what was to later occur. The unprecedented rise and then swoon in . residential real estate catalyzed a global financial market meltdown of unprecedented proportions. And the cost around the world includes a deep global recession. Any notion that the Great Moderation was a permanent fixture died in 2008. Figure Japan s Stock Market Collapse and the Lost Decade for Its Economy Japan Nikkei Stock Market Index vs. Industrial Production The Postcrisis Case for a New Paradigm 7 How did things go from so good to so bad in such short order Mayhem on Wall Street following serenity on Main Street I contend is no coincidence. Instead quiescence on Main Street invites big risk taking on Wall Street. And big wagers create the potential for big problems from small disappointments despite the reality of a moderate economic backdrop. And therein lies the paradox. Goldilocks growth on Main Street spawned risky finance on Wall Street and ultimately the crisis of 2008. Mainstream economists missed this dynamic because they were so excited about low wage and price inflation. Thus a legion of conventional analysts simply failed to recognize that the inflationary boom and bust cycle of the 1970s had been replaced by an equally violent Wall Street driven cycle. Hyman Minsky a renegade financial economist of the postwar period would be amused if he were alive today. Minsky throughout his professional life

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