The Monetary Policy Response to the Financial Crisis in the Euro Area and in the United States: A Comparison

2011 ◽  
pp. 28-45
Author(s):  
Domenica Tropeano
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Financial Crisis ◽  
Euro Area ◽  
The United States ◽  
Policy Response

Global monetary policy divergence will emerge in 2016

2015 ◽  
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Euro Area ◽  
Productivity Growth ◽  
Aggregate Demand ◽  
The United States ◽  
Policy Response ◽  
Market Conditions ◽  
Content Type ◽  
China’S Economy

Significance Despite a less dovish than expected policy response on the part of the ECB on December 3, monetary policy divergence between the Fed and the ECB is likely to heighten in 2016. While the euro remains up 3.3% against the dollar since December 2, prolonged policy divergence between the United States and the euro-area should underpin the dollar's strength. Impacts Fears about China's economy and the end of the commodity super-cycle will also shape market conditions in 2016. A recovery in productivity growth will allow monetary policy normalisation to proceed smoothly, boosting aggregate demand. A stronger dollar will help the ECB achieve its inflation goal, through a weaker euro. A stronger dollar will put further strain on EM assets, particularly in countries with large dollar-denominated corporate debt.

scholarly journals Liquidity Traps and Monetary Policy: Managing a Credit Crunch

2020 ◽  
Vol 12 (3) ◽  
pp. 110-138
Author(s):  
Francisco J. Buera ◽  
Juan Pablo Nicolini
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Financial Crisis ◽  
The United States ◽  
Credit Crunch ◽  
Fiscal Policies ◽  
Collateral Constraint ◽  
Cash In Advance

We study a model with heterogeneous producers that face collateral and cash-in-advance constraints. A tightening of the collateral constraint results in a credit-crunch-generated recession that reproduces some features of the financial crisis that unraveled in 2007 in the United States. We use the model to study the effects, following a credit crunch, of alternative monetary and fiscal policies. (JEL E31, E44, E52, E62, G01, H63)

The Economic Rise of China

Asian Survey ◽  
2017 ◽  
Vol 57 (4) ◽  
pp. 595-617 ◽  
Author(s):  
Zhaohui Wang
Keyword(s):  
United States ◽  
Financial Crisis ◽  
International Institutions ◽  
Global Financial Crisis ◽  
The United States ◽  
Policy Response ◽  
The Core ◽  
Rise Of China ◽  
The Global Financial Crisis ◽  
Rising Power

This paper examines the symbiotic but asymmetric relationship between the United States as the core and China as the semi-periphery. It argues that China’s policy response in both domestic and international domains after the global financial crisis reveals that China as a rising power is no longer a rule-taker, but between a rule-maker and a rule-breaker that adds incremental reforms to current international institutions.

scholarly journals Compilation and analysis of international from-whom-to-whom financial stock table for Japan, Korea, the United States, and China

2021 ◽  
Vol 10 (1) ◽  
Author(s):  
Satoru Hagino ◽  
Jiyoung Kim
Keyword(s):  
United States ◽  
Financial Crisis ◽  
Euro Area ◽  
Global Financial Crisis ◽  
Financial Institution ◽  
The United States ◽  
Asia Pacific ◽  
Input Output ◽  
Flow Of Funds ◽  
The Global Financial Crisis

AbstractThis paper discusses the development of international flow of funds accounts; it compiles and analyzes such accounts with a focus on the global financial crisis. For this purpose, we compile from-whom-to-whom financial stock tables for Japan, Korea, the United States, and China and combine these tables to generate a four-country international from-whom-to-whom financial stock table. Input–output analyses reveal that nonfinancial corporations in the four countries have the largest liability power-of-dispersion and that the Japanese government’s liability power-of-dispersion is large. In contrast, the financial institution sector in Japan has the largest asset power-of-dispersion. In the future, the table could be expanded to include other major Asia–Pacific countries and linked to Euro-area from-whom-to-whom financial stock tables to provide a global from-whom-to-whom financial stock table.

After the Bust, the Denial, 2007–2009

2018 ◽  
Author(s):  
Ashoka Mody
Keyword(s):  
United States ◽  
Financial Crisis ◽  
Euro Area ◽  
European Central Bank ◽  
The United States ◽  
Banking Crises ◽  
Economic Recovery ◽  
Economic Downturn ◽  
European Central ◽  
The U.S

This chapter examines the financial crisis that had begun in early 2007 in the United States. Euro area banks had taken big risks both in the U.S. and at home; almost instantly, they had become enmeshed in the crisis. The global financial implosion had transformed into an unnerving global economic downturn. U.S. authorities had responded with vigor, and by mid-2009, the U.S. was on its way to financial and economic recovery. In the euro area, the European Central Bank (ECB) had remained in denial and national authorities had struggled to tame their domestic banking crises. As the crisis had unfolded, government guarantees that promised to protect creditors and ECB liquidity had propped up euro area banks. However, delays in dealing with insolvent banks, who had gambled and lost, were certain to impede further economic recovery and, ultimately, inflict large costs on governments.

scholarly journals When the Fed Speaks: Arguments, Emotions, and the Microfoundations of Institutions

2018 ◽  
Vol 64 (3) ◽  
pp. 542-575 ◽  
Author(s):  
Derek J. Harmon
Keyword(s):  
United States ◽  
Monetary Policy ◽  
Financial Crisis ◽  
Financial Market ◽  
Federal Reserve ◽  
The United States ◽  
Policy Framework ◽  
Trade Offs ◽  
Business Media ◽  
Monetary Policy Framework

This study investigates what happens when a prominent leader explicitly reaffirms the taken-for-granted assumptions underlying an institution. While such efforts are usually made to reinforce the institution, I theorize that they actually destabilize the institution and create collective uncertainty by reopening the very considerations that people take for granted. Using speeches made by the chair of the United States Federal Reserve from 1998 to 2014, I demonstrate that reaffirming the taken-for-granted assumptions underlying the monetary policy framework creates uncertainty in the broader financial market. This market reaction is also influenced by emotions present at the time of the speech that shape how the event is interpreted. Speeches conveyed in an overall more positive tone suppress this reaction, while more fear in the business media amplifies it. Moreover, supplementary analyses conducted on speeches during the financial crisis suggest that when the taken-for-grantedness of these assumptions has weakened, reaffirming them no longer creates uncertainty to the same extent. This study expands our understanding of the consequences of communication in market contexts, raises important questions about the trade-offs between public transparency and market stability, and contributes new insights to research on the cognitive and emotional microfoundations of institutions.

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