Financial Crisis

Crédit : 4 ECTS
Langue du cours : anglais

Volume horaire

  • CM : 36 h

Description du contenu de l'enseignement

The course is designed to introduce you to the various mechanisms of disequilibria in the economy that creates financial crises. We will explore in turn: the notion of debt intolerance, sovereign external debt crises, domestic debt, inflation and currency crashes, international dimension of the subprime crisis of 2008. You will write one paper for the course. This paper will be a critical analysis of one of the chapters of the Reinhart and Rogoff book that is the principal text for this course. I will also be handing out accompanying papers.

Planning course :
  • Introduction to financial crisis: Preamble and Chapter 1 (R&R)“Is the 2007 sub-prime financial crisis so different? An international comparison” NBER Working paper, January 2008.
 
  • Serial default: Chapter 2 (R&R) - “Institutions for reducing global financial instability.”, Kenneth Rogoff, Journal of Economic Perspectives, Fall 1999.
 
  • The theoretical underpinnings of debt crises: Chapter 4, R&R. “Sovereign debt: is to forgive to forget”, American Economic review, vol. 79.
 
  • Cycles of sovereign default on external default: Chapter 5, R&R - “ Currency crises and collapses”, Dornbusch et.al. Brrokings Paper on Economic Activity, 1995 - “Capital flows and capital market crises: the simple economics of sudden stops” Journal of Applied Economics, 1998.
 
  • External default through history: Chapter 6, R&R - “Reinhart, Rogoff and Savastano” Debt intolerance, Brookings Paper on Economic Activity, Spring 2003.
 
  • Domestic debt and default: Chapter 7, R&R - “Are government bonds net wealth” Robert Barro, Journal of Political Economy, 1974.
 
  • Domestic and External default: Chapter 9, R&R - “A positive theory of fiscal deficits and government debt” Alesina and Tabellini, Review of Economic Studies, 1990.
 
  • Inflation and modern currency crashes: Chapter 12, R&R - “The modern history of exchange rate agreements: a reinterpretation”, Reinhart and Rogoff, NBER Working Paper 8963, 2002.
 
  • U.S. Subprime crisis: Chapter 13, R&R- “Global current account imbalances and exchange rate adjustments” Brookings paper on Economic Activity, Obstfeld and Rogoff, 2005.
 
  • International aspects of US subprime crisis: Chapter 15, R&R - “Crisis in the global economy from tulips to today” Neal and Weidenmier, in Globalization in Historical Perspective.” Ed. Bordo and Taylor
 
  • Emerging markets and the financial crisis: Chapter 16, R&R - “Stories of the 1930’s for the 1980’s”, Diaz-Alejandro, in Financial Policies and the world capital market, ed. Pedro Aspe Armella et.al., NBER
 
  • Synthesis

Mode de contrôle des connaissances

You will write a paper, 5-10 pages, relating a current economic concern to the ideas presented in the course.
Suggested topics: the euro crisis, the role of China, the contribution of the Southern periphera or the role of energy and commodities.

Bibliographie, lectures recommandées

  • This time is different: eight centuries of financial folly”, Carmen M. Reinhart and Kenneth S. Rogoff, 2009, Princeton University press. (R&R).
  • “Is the 2007 sub-prime financial crisis so different? An international comparison” NBER Working paper, January 2008.
  • “Institutions for reducing global financial instability.”, Kenneth Rogoff, Journal of Economic Perspectives, Fall 1999.
  • “Sovereign debt: is to forgive to forget” American Economic review, vol. 79.
  • “ Currrency crises and collapses”, Dornbusch et.al. Brrokings Paper on Economic Activity, 1995.
  • “Capital flows and capital market crises: the simple economics of sudden stops” Journal of Applied Economics, 1998.
  • “Reinhart, Rogoff and Savastano” Debt intolerance, Brookings Paper on Economic Activity, Spring 2003.
  • “Are government bonds net wealth” Robert Barro, Journal of Political Economy, 1974.
  • “A positive theory of fiscal deficits and government debt” Alesina and Tabellini, Review of Economic Studies., 1990.
  • “The modern history of exchange rate agreements: a reinterpretation”, Reinhart and Rogoff. NBER Working Paper 8963, 2002.
  • “Global current account imbalances and exchange rate adjustments” Brookings paper on Economic Activity, Obstfeld and Rogoff, 2005.
  • “Crises in the global economy from tulips to today” Neal and Weidenmier, in Globalization in Historical Perspective.” Ed. Bordo and Taylor, 2003.
  • “Stories of the 1930’s for the 1980’s”, Diaz-Alejandro, in Financial Policies and the world capital market, ed. Pedro Aspe Armella et.al., NBER, 1983.

Enseignant responsable

VASUMATHI VIJAYARAGHAVAN



Année universitaire 2016 - 2017 - Fiche modifiée le : 13-02-2017 (15H48) - Sous réserve de modification.