In The News

Scott B. MacDonald October 13, 2008
As profits surge, financial players eschew government intervention, but crave rescue as problems emerge. Public confidence in banks around the globe could make a cautious comeback, after the UK-led massive semi-nationalization of banks with "equity injection." This YaleGlobal series explores the global financial crisis, detailing how US troubles over mortgage-backed securities and the...
Branko Milanovic October 8, 2008
Gripped with mistrust, uncertain about the value of assets like real estate and company stocks, global banks and investors are reluctant to lend and instead cling to cash. This three-part YaleGlobal series examines the implications of the crisis for different parts of the globe. In the first article of the series, economist Branko Milanovic points out what’s most unnerving about the credit crisis...
Linda Lim September 29, 2008
During the 1997-98 Asian financial crisis, US financial experts lectured Asians to accept good governance, transparency and free-market outcomes while avoiding drastic government intervention. Asian nations indeed tightened their belts, saving funds and seeking out safe havens for funds, including US Treasury bills. “This inflow of foreign lending conveniently enabled the Bush administration to...
Steven Pearlstein September 24, 2008
The global economy is in crisis, with giant financial institutions folding, banks refusing to lend to other banks and some countries closing, changing stock-market rules and currencies dropping in value. “What we are witnessing may be the greatest destruction of financial wealth that the world has ever seen – paper losses measured in the trillions of dollars,” writes Steven Pearlstein for the...
September 18, 2008
With major firms imperiled, the US government has had to up-end its economic policies by intervening and extending rescues to private investment banks, government-sponsored lenders and a major insurance firm. The bail-outs have added to US debt while deflating value of the US dollar. By refusing to bail out investment bank Lehman Brothers, US Treasury Secretary Henry Paulson signaled that...
David Dapice September 17, 2008
Low interest rates prompted many investors and homeowners to pour savings into real estate and homes. Investors, convinced that prices could not fall, purchased debt packages including mortgages based on ample credit with little down payments. Prices for homes and investments soared, with the total value of US housing going from about $12 trillion in 2000 to more than $20 trillion in 2006. Now,...
Raghuram Rajan August 22, 2008
Emerging markets can prepare for a slowdown in the US by allowing their currencies to appreciate in value and developing new products for their own consumers, advises Raghuram Rajan, finance professor with the University of Chicago and former chief economist of the International Monetary Fund. The transition – as developing nations shift from making products for Americans and Europeans to...