The paper "How the Financial Crisis Affected the Australian Government in 2009-2015" is a great example of a macro & microeconomics case study. Australia experienced one of the greatest financial crisis from 2009 to 2015 whose root causes can be traced back to 2007. Many of the big companies operating in the Australian market were forced to close down or merge with other companies to keep on operating. Though it is not clear where the crisis started, some economists suggest that the root of this crisis was the United States of America.
They suggest that during the period before the crisis, people invested in purchasing high priced houses including those for people who had relatively low income. Most of this property was enquired in credit that would be paid overtime. Therefore, this paper explores how the crisis affected various institutions across Australia. According to Berkowitz & Toay (2013), banks lowered their interest rates to encourage people to take more loans. Mortgage rates were lowered too to lure customers to purchase houses. However, house prices still remained unchanged and the financial institutions made a lot of money out of the loans and mortgages.
Immediately, before the start of the crisis, housing companies had built a lot of houses leading to a big decrease in house prices such that houses became cheaper than the remaining house mortgage debt. The possibility of selling the houses and moving was out of the question since the houses fetched little. Most people were evicted from their houses as they could not pay their loans and mortgages. Financial institutions lost a lot of money and the financial ripple moved to all other sectors causing the financial crisis. Effect of the Australia Financial Crisis Banks In Australia, the financial crisis had considerably fewer effects on banks in comparison to other countries.
Prior to the crisis, the Australian economy had recorded a steady growth than most of the other countries making its financial system more prepared and resilient. The banks in Australia had continued to have a healthy operation and did not require capital injections from the government.
Berkowitz, R., & Toay, T. N. (2013).The intellectual origins of the global financial crisis. New York: Fordham University Press
Berlatsky, N. (2010). The global financial crisis. Detroit, MI: Greenhaven Press/Gale Cengage Learning
Cafruny, A. W., & Schwartz, H. M. (2013).Exploring the global financial crisis. Boulder: Lynne Rienner Publishers.
Dolezalek, H. (2012). The global financial crisis. Edina, Minn: ABDO Pub.
Farrar, J. H., & Mayes, D. G. (2013).Globalisation, the global financial crisis and the state. Cheltenham: Edward Elgar.
Gorton, G., & National Bureau of Economic Research. (2008). The Panic of 2007. Cambridge, Mass: National Bureau of Economic Research.