Since 2014
The World Economic Crisis and the Federal Reserve's Response to It: August 2007-December 2008
Studies in Political Economy
View Archive Info| Field | Value | |
| Title |
The World Economic Crisis and the Federal Reserve's Response to It: August 2007-December 2008
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| Creator |
Rude, Christopher
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| Subject |
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| Description |
The world economy is clearly in the midst of a crisis as deep and profound as the Great Depression of the 1930s. The crisis began in 2006 in the US housing and related mortgage markets, but it soon spread to the rest of the US economy and then to the rest of the world. In August 2007, the turmoil moved from the securitized US mortgage markets to the interbank dollarfunding market, causing the latter to freeze up. Worries about the extent and distribution of the mortgage-related losses had become so extensive that market participants no longer had faith in one another’s credit-worthiness, and the market that provides US banks and other dollar-based financial institutions with their liquidity became illiquid as a result. An already very troubled financial system was imploding because the large commercial banks, investment houses, and insurance companies that were at the heart of the US financial system could not borrow short-term from one another, and this was happening just when a loss of confidence was sending liquidity preferences soaring. Then in September 2008, the entire US banking and financial system collapsed as a social financial system in a period of acute turmoil as violent and decisive as that of the 1931 banking crisis. From this point forward, what, at first, appeared as a US-based “subprime mortgage market crisis” revealed itself to be a world economic crisis of major proportions. |
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| Publisher |
Studies in Political Economy
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| Date |
2010-05-25
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — — |
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| Format |
application/pdf
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| Identifier |
http://spe.library.utoronto.ca/index.php/spe/article/view/13082
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| Source |
Studies in Political Economy; Vol 85 (2010): Social Movements & Economies
1918-7033 0707-8552 |
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| Language |
eng
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| Relation |
http://spe.library.utoronto.ca/index.php/spe/article/view/13082/9973
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