Economic Contagion
Financial contagion refers to "the spread of market disturbances—mostly on the downside—from one country to the other, a process observed through co-movements in exchange rates, stock prices, sovereign spreads, and capital flows". Financial contagion can be a potential risk for countries who are trying to integrate their financial system with international financial markets and institutions. It helps explain an economic crisis extending across neighboring countries, or even regions. Financial contagion happens at both the international level and the domestic level. At the domestic level, usually the failure of a domestic bank or financial intermediary triggers transmission when it defaults on interbank liabilities and sells assets in a fire sale, thereby undermining confidence in similar banks. An example of this phenomenon is the subsequent turmoil in the United States financial markets. International financial contagion, which happens in both advanced economies and developin ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Subprime Crisis Diagram - X1
In finance, subprime lending (also referred to as near-prime, subpar, non-prime, and second-chance lending) is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. Historically, subprime borrowers were defined as having FICO scores below 600, although this threshold has varied over time. These loans are characterized by higher interest rates, poor quality collateral, and less favorable terms in order to compensate for higher credit risk. During the early to mid-2000s, many subprime loans were packaged into mortgage-backed securities (MBS) and ultimately defaulted, contributing to the 2008 financial crisis.Lemke, Lins and Picard, ''Mortgage-Backed Securities'', Chapter 3 (Thomson West, 2013 ed.). Defining subprime risk The term ''subprime'' refers to the credit quality of particular borrowers, who have weakened credit histories and a greater risk of loan default than prime borrowers. As people become economically ac ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Contagion (other)
Contagion may refer to: Medicine * Contagious disease A contagious disease is an infectious disease that can be spread rapidly in several ways, including direct contact, indirect contact, and droplet contact. These diseases are caused by organisms such as parasites, bacteria, fungi, and viruses. ... Social science * Social contagion, the spontaneous spread of thoughts, feelings, or behaviors through a group or network * Emotional contagion, a tendency to feel others' emotions * Behavioral contagion, a tendency to mimic others' behavior * Law of contagion, a folk belief related to magical thinking * Financial contagion, a scenario in which financial shocks spread to other financial sectors * Hysterical contagion, an effect in which a group exhibits physical symptoms due to a psychological cause * Sacred contagion, the belief that spiritual properties pass from one entity to another * Complex contagion, a social networking phenomenon * Contagion heuristic, a psychological tec ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Google Books
Google Books (previously known as Google Book Search, Google Print, and by its code-name Project Ocean) is a service from Google that searches the full text of books and magazines that Google has scanned, converted to text using optical character recognition (OCR), and stored in its digital database.The basic Google book link is found at: https://books.google.com/ . The "advanced" interface allowing more specific searches is found at: https://books.google.com/advanced_book_search Books are provided either by publishers and authors through the Google Books Partner Program, or by Google's library partners through the Library Project. Additionally, Google has partnered with a number of magazine publishers to digitize their archives. The Publisher Program was first known as Google Print when it was introduced at the Frankfurt Book Fair in October 2004. The Google Books Library Project, which scans works in the collections of library partners and adds them to the digital inventory, ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Quarterly Journal Of Economics
''The Quarterly Journal of Economics'' is a peer-reviewed academic journal published by the Oxford University Press for the Harvard University Department of Economics. Its current editors-in-chief are Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer, and Stefanie Stantcheva. History It is the oldest professional journal of economics in the English language, and second-oldest in any language after the . It covers all aspects of the field—from the journal's traditional emphasis on micro-theory to both empirical and theoretical macroeconomics. Reception According to the ''Journal Citation Reports'', the journal has a 2015 impact factor of 6.662, ranking it first out of 347 journals in the category "Economics". It is generally regarded as one of the top 5 journals in economics, together with the '' American Economic Review'', ''Econometrica'', the '' Journal of Political Economy'', and '' The Review of Economic Studies''. Notable papers Some of the most inf ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Extraordinary Popular Delusions And The Madness Of Crowds
''Extraordinary Popular Delusions and the Madness of Crowds'' is an early study of crowd psychology by Scottish journalist Charles Mackay, first published in 1841 under the title ''Memoirs of Extraordinary Popular Delusions''. The book was published in three volumes: "National Delusions", "Peculiar Follies", and "Philosophical Delusions". A second edition appeared in 1852, reorganizing the three volumes into two and adding numerous engravings. Mackay was an accomplished teller of stories, though he wrote in a journalistic and somewhat sensational style. The subjects of Mackay's debunking include alchemy, crusades, duels, economic bubbles, fortune-telling, haunted houses, the Drummer of Tedworth, the influence of politics and religion on the shapes of beards and hair, magnetisers (influence of imagination in curing disease), murder through poisoning, prophecies, popular admiration of great thieves, popular follies of great cities, and relics. Present-day writers on economic ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Crowd Psychology
Crowd psychology (or mob psychology) is a subfield of social psychology which examines how the psychology of a group of people differs from the psychology of any one person within the group. The study of crowd psychology looks into the actions and thought processes of both the individual members of the crowd and of the crowd as a collective social entity. The behavior of a crowd is much influenced by deindividuation (seen as a person's loss of responsibility) and by the person's impression of the universality of behavior, both of which conditions increase in magnitude with size of the crowd. Notable theorists in crowd psychology include Gustave Le Bon (1841-1931), Gabriel Tarde (1843-1904), and Sigmund Freud (1856-1939). Many of these theories are today tested or used to simulate crowd behaviors in normal or emergency situations. One of the main focuses in these simulation works aims to prevent crowd crushes and stampedes. Origins According to his biological theory of cri ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Market Failure
In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value.Paul Krugman and Robin Wells Krugman, Robin Wells (2006). ''Economics'', New York, Worth Publishers. The first known use of the term by economists was in 1958,Francis M. Bator (1958). "The Anatomy of Market Failure," ''Quarterly Journal of Economics'', 72(3) pp351–379(press +). but the concept has been traced back to the Victorian writers John Stuart Mill and Henry Sidgwick.Steven G. Medema (2007). "The Hesitant Hand: Mill, Sidgwick, and the Evolution of the Theory of Market Failure," ''History of Political Economy'', 39(3)pp. 331��358. 200Online Working Paper. Market failures are often associated with public goods, time-inconsistent preferences, Information asymmetry, information asymmetries, Market structure, failures of competition, principal–agent problems, externalities,Jean-Jacques L ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Information Asymmetry
In contract theory, mechanism design, and economics, an information asymmetry is a situation where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which can sometimes cause the transactions to be inefficient, causing market failure in the worst case. Examples of this problem are adverse selection, moral hazard,Dembe, Allard E. and Boden, Leslie I. (2000). "Moral Hazard: A Question of Morality?" New Solutions 2000 10(3). 257–79 and monopolies of knowledge. A common way to visualise information asymmetry is with a scale, with one side being the seller and the other the buyer. When the seller has more or better information, the transaction will more likely occur in the seller's favour ("the balance of power has shifted to the seller"). An example of this could be when a used car is sold, the seller is likely to have a much better understanding of the car's condition and hence its market value than the buy ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Market Liquidity
In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the price at which an asset can be sold, and how quickly it can be sold. In a liquid market, the trade-off is mild: one can sell quickly without having to accept a significantly lower price. In a relatively illiquid market, an asset must be discounted in order to sell quickly. A liquid asset is an asset which can be converted into cash within a relatively short period of time, or cash itself, which can be considered the most liquid asset because it can be exchanged for goods and services instantly at face value. Overview A liquid asset has some or all of the following features: it can be sold rapidly, with minimal loss of value, anytime within market hours. The essential characteristic of a liquid market is that there are always ready and wil ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Currency War
Currency war, also known as competitive devaluations, is a condition in international relations, international affairs where countries seek to gain a trade advantage over other countries by causing the exchange rate of their currency to fall in relation to other currencies. As the exchange rate of a country's currency falls, exports become more competitive in other countries, and imports into the country become more and more expensive. Both effects benefit the domestic industry, and thus employment, which receives a boost in demand from both domestic and foreign markets. However, the price increases for import goods (as well as in the cost of foreign travel) are unpopular as they harm citizens' purchasing power; and when all countries adopt a similar strategy, it can lead to a general decline in international trade, harming all countries. Historically, competitive devaluations have been rare as countries have generally preferred to maintain a high value for their currency. Countri ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |
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Debt Crisis
Debt crisis is a situation in which a government (nation, state/province, county, or city etc.) loses the ability of paying back its governmental debt. When the expenditures of a government are more than its tax revenues for a prolonged period, the government may enter into a debt crisis. Various forms of governments finance their expenditures primarily by raising money through taxation. When tax revenues are insufficient, the government can make up the difference by issuing debt. A debt crisis can also refer to a general term for a proliferation of massive public debt relative to tax revenues, especially in reference to Latin American countries during the 1980s, the United States and the European Union since the mid-2000s, and the Chinese debt crises of 2015. Debt wall Hitting the debt wall is a dire financial situation that can occur when a nation depends on foreign debt and/or investment to subsidize their budget and then commercial deficits stop being the recipient of fo ... [...More Info...]       [...Related Items...]     OR:     [Wikipedia]   [Google]   [Baidu]   |