Podcast
Questions and Answers
What is the main cause of banking crises according to the text?
What is the main cause of banking crises according to the text?
Which countries were involved in the first wave of banking crises in the 1980s?
Which countries were involved in the first wave of banking crises in the 1980s?
What was the main cause of the second wave of banking crises?
What was the main cause of the second wave of banking crises?
Which countries were initially involved in the third wave of banking crises?
Which countries were initially involved in the third wave of banking crises?
Signup and view all the answers
What event marked the beginning of the fourth wave of banking crises?
What event marked the beginning of the fourth wave of banking crises?
Signup and view all the answers
What was the impact of banking crises on household wealth?
What was the impact of banking crises on household wealth?
Signup and view all the answers
What was the main cause of the increase in developing countries' foreign indebtedness from 1972 to 1982?
What was the main cause of the increase in developing countries' foreign indebtedness from 1972 to 1982?
Signup and view all the answers
What led to a surge in bank capital in Japan during the 1980s?
What led to a surge in bank capital in Japan during the 1980s?
Signup and view all the answers
What was the impact of the Federal Reserve's contractive monetary policy in 1979?
What was the impact of the Federal Reserve's contractive monetary policy in 1979?
Signup and view all the answers
Which countries experienced a reduction in annual inflation rates from 140% to less than 10% in four years due to a contractive monetary policy by the Bank of Mexico?
Which countries experienced a reduction in annual inflation rates from 140% to less than 10% in four years due to a contractive monetary policy by the Bank of Mexico?
Signup and view all the answers
What was the impact of the sharp declines in prices of residential real estate in several countries?
What was the impact of the sharp declines in prices of residential real estate in several countries?
Signup and view all the answers
What was the impact of the banking crises on economic growth and unemployment?
What was the impact of the banking crises on economic growth and unemployment?
Signup and view all the answers
What is the main cause of banking crises according to the text?
What is the main cause of banking crises according to the text?
Signup and view all the answers
Which countries were involved in the first wave of banking crises in the 1980s?
Which countries were involved in the first wave of banking crises in the 1980s?
Signup and view all the answers
What was the main cause of the second wave of banking crises?
What was the main cause of the second wave of banking crises?
Signup and view all the answers
Which countries were initially involved in the third wave of banking crises?
Which countries were initially involved in the third wave of banking crises?
Signup and view all the answers
What event marked the beginning of the fourth wave of banking crises?
What event marked the beginning of the fourth wave of banking crises?
Signup and view all the answers
What was the impact of banking crises on household wealth?
What was the impact of banking crises on household wealth?
Signup and view all the answers
What was the main cause of the increase in developing countries' foreign indebtedness from 1972 to 1982?
What was the main cause of the increase in developing countries' foreign indebtedness from 1972 to 1982?
Signup and view all the answers
What led to a surge in bank capital in Japan during the 1980s?
What led to a surge in bank capital in Japan during the 1980s?
Signup and view all the answers
What was the impact of the Federal Reserve's contractive monetary policy in 1979?
What was the impact of the Federal Reserve's contractive monetary policy in 1979?
Signup and view all the answers
Which countries experienced a reduction in annual inflation rates from 140% to less than 10% in four years due to a contractive monetary policy by the Bank of Mexico?
Which countries experienced a reduction in annual inflation rates from 140% to less than 10% in four years due to a contractive monetary policy by the Bank of Mexico?
Signup and view all the answers
What was the impact of the sharp declines in prices of residential real estate in several countries?
What was the impact of the sharp declines in prices of residential real estate in several countries?
Signup and view all the answers
What was the impact of the banking crises on economic growth and unemployment?
What was the impact of the banking crises on economic growth and unemployment?
Signup and view all the answers
What is the main reason behind the four waves of banking crises since the early 1970s?
What is the main reason behind the four waves of banking crises since the early 1970s?
Signup and view all the answers
What was the key country in the second wave of banking crises that began in the early 1990s?
What was the key country in the second wave of banking crises that began in the early 1990s?
Signup and view all the answers
Which countries were initially involved in the Asian Financial Crisis that began in mid-1997?
Which countries were initially involved in the Asian Financial Crisis that began in mid-1997?
Signup and view all the answers
What led to the increases in the prices of currencies and securities in the countries that experienced surges in cross-border investment inflows?
What led to the increases in the prices of currencies and securities in the countries that experienced surges in cross-border investment inflows?
Signup and view all the answers
What was the reason behind the reduction in annual inflation rates in Mexico from 140% to less than 10% in four years?
What was the reason behind the reduction in annual inflation rates in Mexico from 140% to less than 10% in four years?
Signup and view all the answers
What led to the increase in foreign indebtedness of developing countries from $125 billion in 1972 to $800 billion in 1982?
What led to the increase in foreign indebtedness of developing countries from $125 billion in 1972 to $800 billion in 1982?
Signup and view all the answers
What led to the bankruptcy of many leading Japanese banks and financial institutions in the early 1990s?
What led to the bankruptcy of many leading Japanese banks and financial institutions in the early 1990s?
Signup and view all the answers
Which countries experienced banking crises in the late 1980s following the financial market developments in Japan?
Which countries experienced banking crises in the late 1980s following the financial market developments in Japan?
Signup and view all the answers
What led to the massive government investments in the banks in the US, UK, Ireland, and several other countries toward the end of 2006?
What led to the massive government investments in the banks in the US, UK, Ireland, and several other countries toward the end of 2006?
Signup and view all the answers
What was the reason behind the surges in cross-border investment inflows that led to the first wave of banking crises in the early 1980s?
What was the reason behind the surges in cross-border investment inflows that led to the first wave of banking crises in the early 1980s?
Signup and view all the answers
What was the impact of the four waves of banking crises on the economies of the affected countries?
What was the impact of the four waves of banking crises on the economies of the affected countries?
Signup and view all the answers
What is the main cause of banking crises according to the text?
What is the main cause of banking crises according to the text?
Signup and view all the answers
What was the key country in the second wave of banking crises?
What was the key country in the second wave of banking crises?
Signup and view all the answers
What was the initial impact of the Asian Financial Crisis?
What was the initial impact of the Asian Financial Crisis?
Signup and view all the answers
What was the fourth wave of banking crises triggered by?
What was the fourth wave of banking crises triggered by?
Signup and view all the answers
What was the impact of banking crises on household wealth?
What was the impact of banking crises on household wealth?
Signup and view all the answers
What was the impact of banking crises on banks' willingness to supply credit?
What was the impact of banking crises on banks' willingness to supply credit?
Signup and view all the answers
What was the impact of the Federal Reserve's contractive monetary policy in 1979?
What was the impact of the Federal Reserve's contractive monetary policy in 1979?
Signup and view all the answers
What was the impact of Japan's financial boom in the 1980s?
What was the impact of Japan's financial boom in the 1980s?
Signup and view all the answers
What was the impact of the Mexican peso's price increase in real terms?
What was the impact of the Mexican peso's price increase in real terms?
Signup and view all the answers
What was the impact of cross-border investment flows to Mexico?
What was the impact of cross-border investment flows to Mexico?
Signup and view all the answers
What was the impact of the 1970s on US dollar bonds and stocks?
What was the impact of the 1970s on US dollar bonds and stocks?
Signup and view all the answers
What was the impact of Finland, Norway, and Sweden's financial market developments?
What was the impact of Finland, Norway, and Sweden's financial market developments?
Signup and view all the answers
What was the key country in the second wave of banking crises?
What was the key country in the second wave of banking crises?
Signup and view all the answers
What was the third wave of banking crises?
What was the third wave of banking crises?
Signup and view all the answers
What was the cause of the surges in cross-border investment inflows that preceded each wave of banking crises?
What was the cause of the surges in cross-border investment inflows that preceded each wave of banking crises?
Signup and view all the answers
Which countries experienced a banking crisis in the early 1980s?
Which countries experienced a banking crisis in the early 1980s?
Signup and view all the answers
What was the cause of the fourth wave of banking crises?
What was the cause of the fourth wave of banking crises?
Signup and view all the answers
What was the impact of each banking crisis on the affected countries?
What was the impact of each banking crisis on the affected countries?
Signup and view all the answers
What was the impact of the Federal Reserve's contractive monetary policy in 1979?
What was the impact of the Federal Reserve's contractive monetary policy in 1979?
Signup and view all the answers
What was the impact of the sharp declines in prices of residential real estate in several countries?
What was the impact of the sharp declines in prices of residential real estate in several countries?
Signup and view all the answers
What was the trend in bank failures during the 1980s and 1990s compared to earlier decades?
What was the trend in bank failures during the 1980s and 1990s compared to earlier decades?
Signup and view all the answers
What was the trend in developing countries' foreign indebtedness from 1972 to 1982?
What was the trend in developing countries' foreign indebtedness from 1972 to 1982?
Signup and view all the answers
What was the impact of the 1970s inflation on the US price level?
What was the impact of the 1970s inflation on the US price level?
Signup and view all the answers
What was the cause of the increase in cross-border investment flows to Mexico?
What was the cause of the increase in cross-border investment flows to Mexico?
Signup and view all the answers
What is the main cause of banking crises according to the text?
What is the main cause of banking crises according to the text?
Signup and view all the answers
Which country was not involved in the first wave of banking crises in the early 1980s?
Which country was not involved in the first wave of banking crises in the early 1980s?
Signup and view all the answers
What was the cause of the second wave of banking crises in the early 1990s?
What was the cause of the second wave of banking crises in the early 1990s?
Signup and view all the answers
Which countries were initially involved in the third wave of banking crises that began in mid-1997?
Which countries were initially involved in the third wave of banking crises that began in mid-1997?
Signup and view all the answers
What was the cause of the fourth wave of banking crises that began in September 2008?
What was the cause of the fourth wave of banking crises that began in September 2008?
Signup and view all the answers
What was the main impact of banking crises on household wealth according to the text?
What was the main impact of banking crises on household wealth according to the text?
Signup and view all the answers
What was the main factor that led to the increase in foreign indebtedness of developing countries from $125 billion in 1972 to $800 billion in 1982?
What was the main factor that led to the increase in foreign indebtedness of developing countries from $125 billion in 1972 to $800 billion in 1982?
Signup and view all the answers
What was the cause of the Federal Reserve's contractive monetary policy in 1979?
What was the cause of the Federal Reserve's contractive monetary policy in 1979?
Signup and view all the answers
What was the main impact of the decline in prices of residential real estate in several countries at the end of 2006?
What was the main impact of the decline in prices of residential real estate in several countries at the end of 2006?
Signup and view all the answers
What was the main impact of banking crises on economic growth according to the text?
What was the main impact of banking crises on economic growth according to the text?
Signup and view all the answers
What was the main reason for the increase in cross-border investment flows to Mexico?
What was the main reason for the increase in cross-border investment flows to Mexico?
Signup and view all the answers
What was the main reason for the increase in the price of the Mexican peso in real terms?
What was the main reason for the increase in the price of the Mexican peso in real terms?
Signup and view all the answers
Study Notes
Financial Crises: A Historical Overview
-
Since the early 1970s, there have been four waves of banking crises, each involving large changes in the prices of commodities, currencies, bonds, stocks, and real estate relative to their long-run average prices.
-
Each country that experienced a banking crisis also had a recession as household wealth declined in response to the sharp fall in the prices of securities and real estate, and as the banks became much more reluctant suppliers of credit as their own capital was depleted.
-
The first wave of banking crises was in the early 1980s when Mexico, Brazil, Argentina, and ten other developing countries defaulted on their $800 billion of US-dollar-denominated indebtedness.
-
Japan was the key country in the second wave of banking crises that began in the early 1990s, real estate prices and stock prices had increased by a factor of five to six in the second half of the 1980s.
-
The Asian Financial Crisis that began in mid-1997 was the third wave; initially Thailand, Malaysia, and Indonesia were involved and subsequently South Korea, Russia, Brazil, and Argentina were impacted.
-
The fourth wave began in September 2008 with the failure of Fannie Mae and Freddie Mac, the two large US-government- sponsored mortgage lenders and the collapse of Lehman Brothers a few days later.
-
Each of these waves of banking crises was preceded by surges in cross-border investment inflows, which led to increases in the prices of currencies and increases in the prices of securities and real estate in the countries that experienced these inflows.
-
The changes in the prices of individual currencies were much larger than those that were suggested by the differences between the inflation rate in a country and the inflation rates in its major trading partners.
-
The number of bank failures during the 1980s and the 1990s was much larger than in earlier decades, and several of these failures resulted from systemic shocks that led to dramatic changes in the financial environment.
-
The sharp declines in prices of residential real estate in the United States, Britain, Ireland, and several other countries that began toward the end of 2006 led to massive government investments in the banks so they could remain open and their depositors would not incur losses.
-
The costs of these crises were extremely high in terms of several metrics – the losses incurred by the banks as a ratio of a country’s GDP and as a share of government spending, the slowdowns in the rates of economic growth, the increases in unemployment and in the output gaps in each country.
-
The massive number of bank failures, the large changes in the prices of currencies and sharp variability in the prices of securities were systematically related and resulted from rapid changes in the global economic environment.
-
The 1970s was a decade of accelerating inflation, the largest-ever sustained increase in the US price level in peace-time, and the US dollar price of gold surged because some investor bought the precious metal on theFinancial crises and market developments in the 1970s-1990s
-
Inflation rates in the US and globally were predicted to accelerate in the 1970s.
-
The real rates of return on US dollar bonds and stocks were negative in the 1970s due to declining prices and increasing goods price levels.
-
Developing countries' foreign indebtedness increased from $125 billion in 1972 to $800 billion in 1982.
-
The Federal Reserve's contractive monetary policy in 1979 led to a surge in interest rates on US dollar securities.
-
Japan experienced a financial boom in the 1980s with a significant increase in real estate and stock prices.
-
Japanese banks rapidly increased deposits, loans, and capital, leading to a surge in bank capital as securities prices increased.
-
Real estate and stock prices in Japan crashed at the beginning of the 1990s, leading to many leading Japanese banks and financial institutions becoming bankrupt.
-
Financial market developments in Finland, Norway, and Sweden followed those in Japan, with banking crises occurring in the late 1980s.
-
Mexico experienced a reduction in annual inflation rates from 140% to less than 10% in four years due to a contractive monetary policy by the Bank of Mexico.
-
Cross-border investment flows to Mexico accelerated due to high real rates of return on government securities and prospective profit rates on industrial investments.
-
The price of the Mexican peso increased in real terms, and its trade deficit climbed to 7% of GDP, and its external debt to 60% of GDP.
-
Investors anticipated Mexico to become a low-cost base for producing automobiles and washing machines and other manufactured goods for US and Canadian markets.
Financial Crises: A Historical Overview
-
Since the early 1970s, there have been four waves of banking crises, each involving large changes in the prices of commodities, currencies, bonds, stocks, and real estate relative to their long-run average prices.
-
Each country that experienced a banking crisis also had a recession as household wealth declined in response to the sharp fall in the prices of securities and real estate, and as the banks became much more reluctant suppliers of credit as their own capital was depleted.
-
The first wave of banking crises was in the early 1980s when Mexico, Brazil, Argentina, and ten other developing countries defaulted on their $800 billion of US-dollar-denominated indebtedness.
-
Japan was the key country in the second wave of banking crises that began in the early 1990s, real estate prices and stock prices had increased by a factor of five to six in the second half of the 1980s.
-
The Asian Financial Crisis that began in mid-1997 was the third wave; initially Thailand, Malaysia, and Indonesia were involved and subsequently South Korea, Russia, Brazil, and Argentina were impacted.
-
The fourth wave began in September 2008 with the failure of Fannie Mae and Freddie Mac, the two large US-government- sponsored mortgage lenders and the collapse of Lehman Brothers a few days later.
-
Each of these waves of banking crises was preceded by surges in cross-border investment inflows, which led to increases in the prices of currencies and increases in the prices of securities and real estate in the countries that experienced these inflows.
-
The changes in the prices of individual currencies were much larger than those that were suggested by the differences between the inflation rate in a country and the inflation rates in its major trading partners.
-
The number of bank failures during the 1980s and the 1990s was much larger than in earlier decades, and several of these failures resulted from systemic shocks that led to dramatic changes in the financial environment.
-
The sharp declines in prices of residential real estate in the United States, Britain, Ireland, and several other countries that began toward the end of 2006 led to massive government investments in the banks so they could remain open and their depositors would not incur losses.
-
The costs of these crises were extremely high in terms of several metrics – the losses incurred by the banks as a ratio of a country’s GDP and as a share of government spending, the slowdowns in the rates of economic growth, the increases in unemployment and in the output gaps in each country.
-
The massive number of bank failures, the large changes in the prices of currencies and sharp variability in the prices of securities were systematically related and resulted from rapid changes in the global economic environment.
-
The 1970s was a decade of accelerating inflation, the largest-ever sustained increase in the US price level in peace-time, and the US dollar price of gold surged because some investor bought the precious metal on theFinancial crises and market developments in the 1970s-1990s
-
Inflation rates in the US and globally were predicted to accelerate in the 1970s.
-
The real rates of return on US dollar bonds and stocks were negative in the 1970s due to declining prices and increasing goods price levels.
-
Developing countries' foreign indebtedness increased from $125 billion in 1972 to $800 billion in 1982.
-
The Federal Reserve's contractive monetary policy in 1979 led to a surge in interest rates on US dollar securities.
-
Japan experienced a financial boom in the 1980s with a significant increase in real estate and stock prices.
-
Japanese banks rapidly increased deposits, loans, and capital, leading to a surge in bank capital as securities prices increased.
-
Real estate and stock prices in Japan crashed at the beginning of the 1990s, leading to many leading Japanese banks and financial institutions becoming bankrupt.
-
Financial market developments in Finland, Norway, and Sweden followed those in Japan, with banking crises occurring in the late 1980s.
-
Mexico experienced a reduction in annual inflation rates from 140% to less than 10% in four years due to a contractive monetary policy by the Bank of Mexico.
-
Cross-border investment flows to Mexico accelerated due to high real rates of return on government securities and prospective profit rates on industrial investments.
-
The price of the Mexican peso increased in real terms, and its trade deficit climbed to 7% of GDP, and its external debt to 60% of GDP.
-
Investors anticipated Mexico to become a low-cost base for producing automobiles and washing machines and other manufactured goods for US and Canadian markets.
Financial Crises: A Historical Overview
-
Since the early 1970s, there have been four waves of banking crises, each involving large changes in the prices of commodities, currencies, bonds, stocks, and real estate relative to their long-run average prices.
-
Each country that experienced a banking crisis also had a recession as household wealth declined in response to the sharp fall in the prices of securities and real estate, and as the banks became much more reluctant suppliers of credit as their own capital was depleted.
-
The first wave of banking crises was in the early 1980s when Mexico, Brazil, Argentina, and ten other developing countries defaulted on their $800 billion of US-dollar-denominated indebtedness.
-
Japan was the key country in the second wave of banking crises that began in the early 1990s, real estate prices and stock prices had increased by a factor of five to six in the second half of the 1980s.
-
The Asian Financial Crisis that began in mid-1997 was the third wave; initially Thailand, Malaysia, and Indonesia were involved and subsequently South Korea, Russia, Brazil, and Argentina were impacted.
-
The fourth wave began in September 2008 with the failure of Fannie Mae and Freddie Mac, the two large US-government- sponsored mortgage lenders and the collapse of Lehman Brothers a few days later.
-
Each of these waves of banking crises was preceded by surges in cross-border investment inflows, which led to increases in the prices of currencies and increases in the prices of securities and real estate in the countries that experienced these inflows.
-
The changes in the prices of individual currencies were much larger than those that were suggested by the differences between the inflation rate in a country and the inflation rates in its major trading partners.
-
The number of bank failures during the 1980s and the 1990s was much larger than in earlier decades, and several of these failures resulted from systemic shocks that led to dramatic changes in the financial environment.
-
The sharp declines in prices of residential real estate in the United States, Britain, Ireland, and several other countries that began toward the end of 2006 led to massive government investments in the banks so they could remain open and their depositors would not incur losses.
-
The costs of these crises were extremely high in terms of several metrics – the losses incurred by the banks as a ratio of a country’s GDP and as a share of government spending, the slowdowns in the rates of economic growth, the increases in unemployment and in the output gaps in each country.
-
The massive number of bank failures, the large changes in the prices of currencies and sharp variability in the prices of securities were systematically related and resulted from rapid changes in the global economic environment.
-
The 1970s was a decade of accelerating inflation, the largest-ever sustained increase in the US price level in peace-time, and the US dollar price of gold surged because some investor bought the precious metal on theFinancial crises and market developments in the 1970s-1990s
-
Inflation rates in the US and globally were predicted to accelerate in the 1970s.
-
The real rates of return on US dollar bonds and stocks were negative in the 1970s due to declining prices and increasing goods price levels.
-
Developing countries' foreign indebtedness increased from $125 billion in 1972 to $800 billion in 1982.
-
The Federal Reserve's contractive monetary policy in 1979 led to a surge in interest rates on US dollar securities.
-
Japan experienced a financial boom in the 1980s with a significant increase in real estate and stock prices.
-
Japanese banks rapidly increased deposits, loans, and capital, leading to a surge in bank capital as securities prices increased.
-
Real estate and stock prices in Japan crashed at the beginning of the 1990s, leading to many leading Japanese banks and financial institutions becoming bankrupt.
-
Financial market developments in Finland, Norway, and Sweden followed those in Japan, with banking crises occurring in the late 1980s.
-
Mexico experienced a reduction in annual inflation rates from 140% to less than 10% in four years due to a contractive monetary policy by the Bank of Mexico.
-
Cross-border investment flows to Mexico accelerated due to high real rates of return on government securities and prospective profit rates on industrial investments.
-
The price of the Mexican peso increased in real terms, and its trade deficit climbed to 7% of GDP, and its external debt to 60% of GDP.
-
Investors anticipated Mexico to become a low-cost base for producing automobiles and washing machines and other manufactured goods for US and Canadian markets.
Financial Crises: A Historical Overview
-
Since the early 1970s, there have been four waves of banking crises, each involving large changes in the prices of commodities, currencies, bonds, stocks, and real estate relative to their long-run average prices.
-
Each country that experienced a banking crisis also had a recession as household wealth declined in response to the sharp fall in the prices of securities and real estate, and as the banks became much more reluctant suppliers of credit as their own capital was depleted.
-
The first wave of banking crises was in the early 1980s when Mexico, Brazil, Argentina, and ten other developing countries defaulted on their $800 billion of US-dollar-denominated indebtedness.
-
Japan was the key country in the second wave of banking crises that began in the early 1990s, real estate prices and stock prices had increased by a factor of five to six in the second half of the 1980s.
-
The Asian Financial Crisis that began in mid-1997 was the third wave; initially Thailand, Malaysia, and Indonesia were involved and subsequently South Korea, Russia, Brazil, and Argentina were impacted.
-
The fourth wave began in September 2008 with the failure of Fannie Mae and Freddie Mac, the two large US-government- sponsored mortgage lenders and the collapse of Lehman Brothers a few days later.
-
Each of these waves of banking crises was preceded by surges in cross-border investment inflows, which led to increases in the prices of currencies and increases in the prices of securities and real estate in the countries that experienced these inflows.
-
The changes in the prices of individual currencies were much larger than those that were suggested by the differences between the inflation rate in a country and the inflation rates in its major trading partners.
-
The number of bank failures during the 1980s and the 1990s was much larger than in earlier decades, and several of these failures resulted from systemic shocks that led to dramatic changes in the financial environment.
-
The sharp declines in prices of residential real estate in the United States, Britain, Ireland, and several other countries that began toward the end of 2006 led to massive government investments in the banks so they could remain open and their depositors would not incur losses.
-
The costs of these crises were extremely high in terms of several metrics – the losses incurred by the banks as a ratio of a country’s GDP and as a share of government spending, the slowdowns in the rates of economic growth, the increases in unemployment and in the output gaps in each country.
-
The massive number of bank failures, the large changes in the prices of currencies and sharp variability in the prices of securities were systematically related and resulted from rapid changes in the global economic environment.
-
The 1970s was a decade of accelerating inflation, the largest-ever sustained increase in the US price level in peace-time, and the US dollar price of gold surged because some investor bought the precious metal on theFinancial crises and market developments in the 1970s-1990s
-
Inflation rates in the US and globally were predicted to accelerate in the 1970s.
-
The real rates of return on US dollar bonds and stocks were negative in the 1970s due to declining prices and increasing goods price levels.
-
Developing countries' foreign indebtedness increased from $125 billion in 1972 to $800 billion in 1982.
-
The Federal Reserve's contractive monetary policy in 1979 led to a surge in interest rates on US dollar securities.
-
Japan experienced a financial boom in the 1980s with a significant increase in real estate and stock prices.
-
Japanese banks rapidly increased deposits, loans, and capital, leading to a surge in bank capital as securities prices increased.
-
Real estate and stock prices in Japan crashed at the beginning of the 1990s, leading to many leading Japanese banks and financial institutions becoming bankrupt.
-
Financial market developments in Finland, Norway, and Sweden followed those in Japan, with banking crises occurring in the late 1980s.
-
Mexico experienced a reduction in annual inflation rates from 140% to less than 10% in four years due to a contractive monetary policy by the Bank of Mexico.
-
Cross-border investment flows to Mexico accelerated due to high real rates of return on government securities and prospective profit rates on industrial investments.
-
The price of the Mexican peso increased in real terms, and its trade deficit climbed to 7% of GDP, and its external debt to 60% of GDP.
-
Investors anticipated Mexico to become a low-cost base for producing automobiles and washing machines and other manufactured goods for US and Canadian markets.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge of financial crises with our historical overview quiz. From the banking crises in the 1980s to the collapse of Lehman Brothers in 2008, this quiz covers the major events, causes, and impacts of financial crises throughout history. Challenge yourself to see how much you know about cross-border investment flows, inflation rates, and the effects of these crises on global economies. Don't miss the opportunity to test your financial knowledge with this informative and engaging quiz.
