Short Supply 2017 - Economics Students Society of Australia

Short Supply 2017

A collection of 11 posts

Making America Great Again (at least for Trump’s friends)

Making America Great Again (at least for Trump’s friends)

Donald Trump won the presidential campaign off the back of the ‘forgotten man’. He promised to make America great again, courting the support of a resentful working class who had been promised the American Dream, yet have failed to accomplish it. He accused Hilary Clinton of “meeting in secret with

Lessons learnt from the GFC and how to heed them

Lessons learnt from the GFC and how to heed them

Boards’ inability to effectively self-regulate firms Prior to the GFC, poor regulation by boards left financial institutions vulnerable to economic downturns. Short-term profits and market share were the primary concern of banks, with Chuck Prince, former CEO of Citibank, declaring “while the music is playing, you have to dance”. [1]

How did the GFC affect developing countries?

How did the GFC affect developing countries?

While the Global Financial Crisis originated in developed countries, developing countries were not immune to its effects. Reduced foreign investment, trade and remittances had a significant impact on the economies of the world’s poorest countries. The crisis manifested itself in growing budget and trade deficits, currency devaluations, higher rates

The Impact of the Global Financial Crisis on Liberal Democracy

The Impact of the Global Financial Crisis on Liberal Democracy

In the wake of the Global Financial Crisis (GFC), concerns have been raised about the future of liberal democracy. This is not surprising, as it is usually during times of economic recession that the liberal democratic ideology is called into question, with the GFC being no exception. With its two

Deutsche Bank and the Global Financial Crisis

Deutsche Bank and the Global Financial Crisis

Deutsche Bank has been scrutinised and surrounded by controversy in relation to its conduct leading up to the Global Financial Crisis. However, when the facts are distilled from the myths and stigma, what is revealed is an admirable recovery by the institution, despite tumultuous economic times and the bad publicity.

Australia and the GFC: a pair of star-crossed lovers

Australia and the GFC: a pair of star-crossed lovers

Australia, a few key themes tend to spring up: success, the theories of John Maynard Keynes, and increased production. A bit of context is in order. Firstly, Australia successfully avoided a recession during one of the most impactful global crises in decades. Secondly, John Maynard Keynes is the mind behind

Capital inflows and the Global Financial Crisis

Capital inflows

Capital inflows and the Global Financial Crisis

Australia has imported capital for most of its history, which has allowed investment to consistently exceed the volume of domestic savings. As a result, Australia has enjoyed the benefits of a larger capital stock which, through lifting the amount of capital per worker, has resulted in a more productive workforce,

You get what you pay for: Behavioural economics and the GFC

behavioural economics

You get what you pay for: Behavioural economics and the GFC

Risk-taking behaviour of firms The failure of Lehman Brothers and Bear Stearns were at the hands of employees who took risks at the expense of the firm. It is true that every asset contains some amount of risk. However, the issue was that employees were never held accountable for the

The Underlying Causes of the ‘Global Financial Crisis’

The Underlying Causes of the ‘Global Financial Crisis’

Common explanations put forth for the financial crisis of 2007-2008 have been rather simplistic, scratching the surface of issues caused by decades of structural changes in the global economic environment. One widely held understanding of the crisis nominates the vast sub-prime mortgage default in the USA as the primary catalyst.

Risky business: the free insurance provided to banks

Risky business: the free insurance provided to banks

Moral hazard (n): Where the actions of one party change to the detriment of the other party after a transaction has taken place. Imagine what life would be like if every time you got in trouble, whether it be for speeding, theft or even indecent exposure, your parents bailed you

Uncertain Times, Bad Times

global financial crisis

Uncertain Times, Bad Times

In January 2009, in the midst of the Global Financial Crisis, Olivier Blanchard, then Chief Economist of the International Monetary Fund, wrote “Crises feed uncertainty. And uncertainty affects behavior, which feeds the crisis. […] [Uncertainty] affects consumption and investment decisions, and is largely behind the dramatic collapse in demand we have