This book continues the discussion from Volume I on economic, fiscal, and financial crises in world history that have had a great impact on the entire world and the fiscal measures taken by governments to combat each crisis. Such events are often described as black swans, a concept introduced by Economist and Risk Analyst Nassim Nicholas Taleb in the book Fooled By Randomness in 2001, in reference to events that were thought to be impossible but had a huge impact when they did happen.
The beginning of this book notes that crises are catastrophic periods when the consequences of economic mistakes made by governments are reflected to the public. Although economic crises are seen as opportunities in some cases, they have created a burden for the people. Some economic crises even triggered the world war. A recent example, Adolf Hitler, was seen as a hope of salvation in Germany due to the Great Depression and was brought to power.The twentieth century, when two great world wars took place on the stage of history, is the witness of major economic crises as well as wars. These crises have caused social and economic paradigm shifts to be experienced much faster and more effectively than the previous centuries. The transformation of the demand-oriented economic understanding created by the Great Depression in 1929 into an interventionist social state understanding, especially after the World War Two, increased the intervention of states in the socioeconomic field. In this period, the reconstruction of the countries, the development of social welfare services, the assurance of human rights, the acceleration of industrialization and development, and the economic growth and income growth of the countries resulted in the golden age enjoyed by the societies of the period.The interventionist social state, seen as a prescription and opportunity in the past crisis, was one of the cornerstones of the crisis in the last quarter of the century in the 1970s. Against interventionism, with the rise of neo-liberalism, financial liberalization, information society, and technological discoveries, globalization has become the new phenomenon of the age. This book examines in detail the causes, occurrences, and results of the twentieth-century crises.
Author(s): Bernur Açıkgöz (editor)
Series: Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application
Publisher: Springer
Year: 2023
Language: English
Pages: 167
City: Singapore
Preface
Contents
Editor and Contributors
List of Tables
List of Charts
1 Introduction: Models Related to the Contagion of Financial Crises
1.1 Introduction
1.1.1 Contamination by Spillover
1.1.2 Pure Contagion
1.1.3 Herd Behavior
References
2 Great Economic Depression of 1929: First Global Economic Crisis
2.1 Introduction
2.2 Historical Development of the Great Depression of 1929
2.3 Pre-crisis Economic Understanding in the US
2.4 Causes of 1929 Great Depression
2.4.1 Stock Market Crash of October 1929
2.4.2 Decline in Consumer Demand
2.4.3 Abundance of Money
2.4.4 Declining Trust in the Economy and Bank Panics
2.4.5 Inexperienced Economy Management
2.4.6 Insisting on Gold Standard in Money
2.4.7 Inequality in Income Distribution
2.4.8 Smoot-Hawley Tariffs Act
2.5 Impact of the Great Depression
2.5.1 Its Impact on the US
2.6 Its Impact on the World
2.6.1 World Trade Volume
2.6.2 Degree and Duration of Its Impact on the World Economy
2.6.3 Industrial Production
2.6.4 Unemployment Rate
2.6.5 Growth
2.6.6 Interest Rates
2.6.7 Political Impact
2.7 Its Impact on the Turkish Economy
2.7.1 Its Impact on Gross National Product
2.7.2 Its Impact on Consumer Price Index
2.7.3 Its Impact on Foreign Trade
2.7.4 Its Impact on Foreign Exchange Rate
2.7.5 Its Impact on Economic Views
2.8 Exit Strategies from the Great Depression
2.8.1 Exit Strategies Implemented in the US
2.8.2 Exit Strategies Implemented in Other Selected Countries
2.8.3 Germany
2.8.4 United Kingdom (UK)
2.8.5 Italy
2.8.6 Exit Strategies Implement in Turkey
2.9 Conclusion
References
3 1973 Oil Crisis: An Economic Illness-Stagflation!
3.1 Introduction
3.1.1 Factors Leading to the Oil Crisis
3.2 New Illness of the Economy: Stagflation
3.2.1 Growth, Inflation and Unemployment in Developed Countries
3.2.2 Policies Against Stagflation
3.2.3 Impact of Stagflation on World and Turkish Economy
3.3 Conclusion
References
4 Chilean Economic Crisis (82–86): Twin Crisis-Finance/Banking Crisis
4.1 Introduction
4.2 Chilean Economy
4.2.1 Long-Term Chilean Economy (1970–1990)
4.2.2 Shifting from Closed Economy to Open Economy
4.2.3 Development of Chilean Banking and Finance Sector
4.3 Increasing Current Account Deficit Following Increasing Capital Movements
4.4 Monetary Liberalization and Twin Crisis
4.4.1 The Effect of Dollarization in the Emergence of the Crisis
4.4.2 Importance of Oil Crisis of 1973 in Monetary Liberalization
4.4.3 Liberalization and Misguided Fiscal Policies
4.4.4 Outbreak of the Crisis
4.5 Descriptive Analysis of the Crisis
4.6 Conclusion
References
5 Stock Market Crash of 1987: Black Monday
5.1 Introduction
5.2 Black Monday Crisis
5.3 Pre-crisis Developments
5.4 Causes of the Crisis
5.5 After the Crisis
5.6 Conclusion
References
6 Mexican Tequila Crisis of 1994
6.1 Introduction
6.2 Mexican Economy
6.3 Background of Mexican Economy (1950–1980)
6.4 Pre-crisis Outlook
6.5 Tequila Crisis
6.6 Background and Causes of the Crisis
6.7 Views on Explaining the Crisis
6.8 Post-crisis Period
6.9 Conclusion
References
7 1994 Financial Crisis in Turkey
7.1 Introduction
7.2 Causes of Economic Crisis of 1994
7.2.1 Overall Impact of January 24, 1980 Stability Program
7.2.2 Short-Term Speculative Foreign Capital Inflows Under Liberalization of Financial Markets (1989–1994)
7.2.3 Deterioration in Foreign Trade Balance
7.2.4 Public Deficits Reaching Unsustainable Size
7.2.5 Inflation Phenomenon
7.2.6 Excessive Public Debt and Public Sector Borrowing Requirement
7.2.7 Low Exchange Rate Effect (Overvalued National Currency)
7.2.8 Banks’ Open Positions
7.2.9 Change in the Financing Method of Public Deficits
7.3 Misguided Policies of Economic Management
7.3.1 Decrease in Central Bank International Reserves
7.3.2 Decreasing Share of Manufacturing Industry in Total Investments
7.4 Impacts of Turkey Financial Crisis
7.4.1 Excessive Depreciation of Turkish Lira
7.4.2 Economic Growth
7.4.3 Inflation
7.4.4 Stock Market
7.4.5 Foreign Capital Inflow
7.4.6 Interest Rates
7.4.7 Banking Sector
7.5 Exit Strategies
7.5.1 Nisan Economic Stability Program
7.5.2 Results of the April Economic Stability Program
7.6 Conclusion
References
8 1997 Asian Crisis
8.1 Introduction
8.2 An Overview of Asian Tigers
8.3 Financial Crisis Models
8.4 1997 Asian Crisis Process and Its Causes
8.4.1 Thailand: Where the Crisis Began
8.4.2 Indonesia
8.4.3 South Korea
8.4.4 Malaysia
8.5 IMF Aids and Criticisms of IMF
8.6 Conclusion
References
9 1998 Russian Financial Crisis
9.1 Introduction
9.2 Before the Crisis
9.3 Causes of the Crisis
9.4 After the Crisis
9.5 Conclusion
References
Index
