Financial market contagion and the effects of the crises in East Asia, Russia and Latin America

1998 ◽  
Vol 166 ◽  
pp. 57-73 ◽  
Author(s):  
Ray Barrell ◽  
Karen Dury ◽  
Dawn Holland ◽  
Nigel Pain ◽  
Dirk te Velde
Keyword(s):  
World Economy ◽  
Japanese Economy ◽  
Equity Prices ◽  
Profit Margins ◽  
Us Economy ◽  
The Us ◽  
The World ◽  
Market Contagion ◽  
Equity Price ◽  
Chinese Yuan

The Asian crisis has had a marked effect on the world economy over the past fifteen months. Private sector demand has collapsed in the affected economies and reinforced the effects arising from the deflationary forces in the Japanese economy at present. Up until this summer it did not appear likely that the world economy as a whole would slide into a full scale recession, although it was clear that growth had begun to slow in the industrialised economies. There were also important downside risks in our forecasts at that time; in particular the danger that a policy of monetisation in Japan would further weaken the yen and set in motion renewed disruption by enforcing a devaluation of the Chinese yuan against the dollar. It was also clear that profit margins were coming under pressure in the US economy, raising the possibility that future dividends would be somewhat weaker than implied by the exceptionally rapid growth in real equity prices since 1994. Neither a Chinese devaluation nor an equity price collapse were however part of our central forecasts.

The world economy

2000 ◽  
Vol 172 ◽  
pp. 3-3
Keyword(s):  
Interest Rates ◽  
World Economy ◽  
Japanese Economy ◽  
List Type ◽  
European Central ◽  
Us Economy ◽  
The Us ◽  
The World ◽  
Global Economic Growth ◽  
First Time

•The world economy will experience a synchronised upturn for the first time since 1994, with growth accelerating in 2000 in all the major regions.•Despite global economic growth of over 4 per cent in 2000, inflation will remain under control at 2 per cent in the OECD area.•The US economy will expand by 4.5 per cent, spurring the Federal Reserve to raise interest rates to 7 per cent by the beginning of next year.•The euro zone will grow by 3.4 per cent, prompting the European Central Bank to raise interest rates to 4 per cent by the end of 2000 and 4.5 per cent in 2001.•Although the Japanese economy has technically slipped back into recession, we expect growth of 1 per cent in 2000, strengthening to 2.4 per cent in 2001.

The World Economy

2007 ◽  
Vol 200 ◽  
pp. 7-30 ◽  
Keyword(s):  
Global Economy ◽  
World Economy ◽  
Housing Markets ◽  
Housing Investment ◽  
The Past ◽  
Us Economy ◽  
The Us ◽  
The World ◽  
Monetary Authorities ◽  
Rates Of Growth

The global economy expanded by 5.3 per cent in 2006, one of the fastest rates of growth in the past 35 years. We project further expansions of 5 per cent this year and 4¾ per cent in 2008. The key risks to the forecast that we highlight in this Review relate to global housing markets and the current stance of monetary policy. The US economy is restrained by the recent correction in its housing market, which is expected to continue to weigh on the economy through 2008. There is some concern that the housing investment downturn may spread to other economies, and in this report we explore the areas most at risk to such a contagion. We also consider the recent volatility in the oil price, which makes it difficult for monetary authorities to distinguish signal from noise. If too much emphasis is placed on what subsequently turns out to be noise, policy settings could turn out to be overly lax or stringent.

At A Glance…: The world economy

2006 ◽  
Vol 196 ◽  
pp. 2-3
Keyword(s):  
Interest Rates ◽  
Euro Area ◽  
Global Economy ◽  
World Economy ◽  
Us Economy ◽  
The Us ◽  
The World ◽  
Global Growth

• Global growth will remain rapid over the next two years, with world GDP rising by 4.8 per cent in 2006 and 4.5 per cent in 2007.• China's growing weight in the global economy is a key reason why interest rates have been unusually low.• The US economy will grow by 3.3 per cent this year and 2.9 per cent in 2007.• Japan will expand by 2.9 per cent in 2006 and 2.3 per cent next year.• The Euro Area will grow by 2.1 per cent this year and 2.0 per cent in 2007.

At a Glance…

2010 ◽  
Vol 212 ◽  
pp. F2-F2
Keyword(s):  
Euro Area ◽  
World Trade ◽  
World Economy ◽  
Chinese Economy ◽  
List Type ◽  
Us Economy ◽  
The Us ◽  
The World

The world economy will expand by 3.9 per cent in 2010 and 3.8 per cent in 2011.World trade will increase by 9.6 per cent this year and 5.7 per cent in 2011.The Chinese economy will grow by 9.8 per cent in 2010 and 9 per cent next year.Japanese GDP will expand by 2 per cent this year and 1.5 per cent in 2011.The US economy will grow by 2.9 per cent in 2010 and 2.7 per cent next year.The Euro Area will expand by 1.2 per cent this year and 1.8 per cent in 2011.

Risk and Equity Market Weakness: Their Implications for the World Economy

2001 ◽  
Vol 178 ◽  
pp. 9-13
Author(s):  
Ray Barrell
Keyword(s):  
New York ◽  
Stock Market ◽  
Financial Markets ◽  
World Economy ◽  
Terrorist Attack ◽  
Initial Reaction ◽  
Us Economy ◽  
The Us ◽  
The World ◽  
Stock Market Valuations

The terrorist attack on New York on 11 September 2001 caused considerable disruption to the US economy, and especially to the US financial markets. The initial reaction of the financial markets was to increase the discount factor on future profits and reduce future profit projections, and hence stock market valuations fell markedly, as can be seen from charts 1 and 2. This fall has been largely reversed since the attack, but markets have in general continued their decline from their peaks a year or so ago. Falls have been particularly precipitate since July 2001, with the German and French stock market indices falling by 20 per cent over the last three months, whilst the Canadian markets have fallen even more. Stock market falls of the scale we have seen since July are almost bound to impact on the level of economic activity in the major economies. They are likely to reduce the rate of growth of the world economy over the medium term as well as change the structure of saving and investment.

The World Economy: Effects of Risk Premia Falling Below Sustainable Levels in the US

2009 ◽  
Vol 210 ◽  
pp. 16-20
Keyword(s):  
World Economy ◽  
Positive Impact ◽  
Risk Premia ◽  
Rapid Decline ◽  
Positive Contribution ◽  
Short Term ◽  
The Third ◽  
Us Economy ◽  
The Us ◽  
The World

The outlook for the US economy has improved modestly compared to our projections three months ago. This can be attributed largely to the unexpectedly rapid decline in risk premia, while the recovery in world trade appears to be being led by Asian markets, allowing a positive contribution to US growth from net trade in the short term. After a cumulative decline in output of 3.8 per cent in the US in the year to the second quarter of 2009, GDP probably recorded a rise in the third quarter, supported by a rise in consumer spending and a positive impact from net trade. We expect output to decline by 2.8 per cent in 2009 as a whole, and forecast a rise in US GDP of 1.3 per cent in 2010.

At a Glance …

2010 ◽  
Vol 213 ◽  
pp. F2-F2
Keyword(s):  
Euro Area ◽  
World Trade ◽  
World Economy ◽  
Chinese Economy ◽  
List Type ◽  
Us Economy ◽  
The Us ◽  
The World

The world economy will expand by 5.0 per cent in 2010 and 4.4 per cent in 2011.World trade will increase by 14.2 per cent this year and 8.8 per cent in 2011.The Chinese economy will grow by 11.6 per cent in 2010 and 8.3 per cent next year.Japanese GDP will expand by 3.3 per cent this year and 1.1 per cent in 2011.The US economy will grow by 3.1 per cent in 2010 and 3.0 per cent next year.The Euro Area will expand by 1.3 per cent this year and 1.8 per cent in 2011.

The World Economy

1997 ◽  
Vol 160 ◽  
pp. 36-62
Author(s):  
Ray Barrell ◽  
Julian Morgan ◽  
Nigel Pain ◽  
Florence Hubert
Keyword(s):  
Monetary Policy ◽  
Government Policy ◽  
Growth Rates ◽  
World Economy ◽  
Oecd Countries ◽  
Domestic Demand ◽  
Spare Capacity ◽  
Us Economy ◽  
The Us ◽  
The World

It is increasingly clear that the world economy has been recovering relatively strongly from a pause in activity at the end of 1995. The recovery has also been relatively well spread around the globe, with Japan displaying the strongest growth amongst the larger economies, in part because of the effects of the depreciation of the yen, but also because government policy was expansionary throughout last year. Although growth rates in Europe appear low in 1996, with Germany and France both recording growth of less than 1½ per cent, growth through the year has generally been strong. It appears there is still some spare capacity in Europe, and hence growth can be expected to strengthen further into 1998, at least within continental Europe. The US economy has been growing at or above capacity for several years; in the fourth quarter of last year output rose by a further 1 per cent, with growth through the year of over 3 per cent. Domestic demand also rose strongly in Canada and Mexico in the latter half of last year. Growth in the NAFTA economies is expected to strengthen in 1997, but to slow into 1998 in the aftermath of moves to tighten monetary policy. Overall, as can be seen from Table 1, we expect a period of above trend growth and low inflation in the majority of the OECD countries.

scholarly journals Character of the present financial crisis in USA and its possible global consequences

2008 ◽  
Vol 60 (4) ◽  
pp. 431-455
Author(s):  
Zaklina Petrac-Stepanovic
Keyword(s):  
Financial Crisis ◽  
Global Economy ◽  
World Economy ◽  
Financial System ◽  
Real Estate Market ◽  
Current Crisis ◽  
Us Economy ◽  
The Us ◽  
The World ◽  
National Economies

The US economy is facing the first big financial crisis in the 21st century. The author points out that the current crisis is much different from the previous ones by its characteristics, causes, consequences it produces on the world economy and international financial system in particular. The problems that were noticeable in the US loan market in the second half of 2007, which have escalated into a crisis of the financial system in 2008 creating instability in the world financial markets, were mostly caused by the losses on the American real estate market. For the fact that the highly integrated world economy has enabled rapidly and easily transmission the effects of real and monetary trends, reducing, on the other hand, the countries' prospects to protect their economies and populations from their effects it is evident that the way the US manages its financial system has the exceptional significance beyond USA, too. As the increasing number of countries is facing with direct or indirect effects of the current crisis it is in the interest of all those that undertaking actions to stop further negative repercussions on their national economies and ensure global economy growth. .

scholarly journals THE FINANCIAL CRISIS AND THE DOLLAR HEGEMONY

2012 ◽  
Vol 1 (1) ◽  
pp. 125-140
Author(s):  
Marcelo Milan
Keyword(s):  
Financial Crisis ◽  
Financial Crises ◽  
World Economy ◽  
International Reserve ◽  
Us Economy ◽  
The Us ◽  
The World ◽  
Us Dollar

This paper discusses the US dollar hegemony in the world economy. The discussion is carried out in three steps. First, the paper analyses the evolution of the US dollar in the world economy, emphasizing its resilience in the context of frequent financial crises. Second, the work discusses and compares the perspectives that trust the US dollar’s continuing role as an international reserve to those that assume a likely decline of both the dollar and the US economy after the 2007 financial crash. Finally, the article seeks to raise a few potential consequences of the continuing hegemony or declining of the dollar for the peripheral countries.

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