While few predicted the financial catastrophe, almost everyone has an explanation as to why it happened. To economists, it all seems painfully simple. Too much foreign money was flowing into the US from the Asian countries especially China. The availability of easy credit meant that too many people borrowed to buy properties that they could not afford. The bankers bundled up these loans and sold them to investors that could not understand the complexity of these bundles and the risks inherent in them. Once US borrowers started defaulting on their mortgages, they lost their houses and investors all around the world, including banks and hedge funds, lost their investments. For the critics of Bush administration, the government failed to regulate the activities of the banking behemoths. For the Fed critics, the crisis resulted from Alan Greenspan’s policy of keeping the interest rates low for an extended period of time. Given the ongoing nature of the crisis, many complicated explanations will surface in the years to come. Yet the root of the economic depression might very well lie in one fundamental human instinct: greed.

The G-20 and the Future of Capitalism – Part III

For all its inequity, instability and immorality, a chastened capitalism is here to stay
Pranab Bardhan
April 3, 2009

World Economy: What Went Wrong

Loose regulations transformed small investment firms into entities that are “too big to fail”
March 23, 2009

Scrambling to Clean Up After a Category 4 Financial Storm

There’s only so much the US government can do about debt nobody wants to pay for or hold
Steven Pearlstein
September 24, 2008

Protests Greet Yet Another WTO Meeting

Globalization's opponents and proponents should find common ground.
Pranab Bardhan
September 8, 2003

Globalization and the Markets – Part I

Complicated new financial tools outpaced the comprehension of regulators, bankers or customers
David Dapice
January 22, 2008

Globalization and the Markets – Part II

Despite initial flutter, China won’t let its stock market fall in the much anticipated year of the Olympics
Xu Sitao
January 24, 2008

The Invisible Hand of Globalization

Billions of economic decisions from entrepreneurs and consumers are a force beyond the control of regulators
Susan Froetschel
January 3, 2008