The reason for the crisis in financial markets are defaulted on mortgages in the United States. In the 90’s were in U.S. interest rates very low at around 1 percent, which led both to the intense interest on mortgages, on the other hand, contribute to growing estate bubble. After 2005, there has been an increase [...]
This monday is one of the worst mondays since great depression. Stocks posted big losses in markets across much of the globe as investors absorbed bankruptcy plans at Lehman and Merrill Lynch’s forced sale to Bank of America for $50 billion in stock. And perhaps most ominously, American International Group Inc. is asking the Federal [...]
Monetarist explanations
In their 1963 book “A Monetary History of the United States, 1867-1960″, Milton Friedman and Anna Schwartz laid out their case for a different explanation of the Great Depression. After the Depression, the primary explanations of it tended to ignore the importance of money. However, in the monetarist view, the Depression was “in fact [...]
Causes of the Great Depression are still a matter of active debate among economists. The specific economic events that took place during the Great Depression have been studied thoroughly: a deflationary spiral forced dramatic falls in asset and commodity prices, dramatic drops in demand and credit, and disruption of trade, ultimately resulting in widespread poverty [...]
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