Essays on Intermediate Macroeconomics: Causes of the 2008 Global Financial Crisis Report

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The paper "Intermediate Macroeconomics: Causes of the 2008 Global Financial Crisis" is a wonderful example of a report on macro and microeconomics. The issue of global financial crises is a known phenomenon due to the effects that it leaves behind. Looking at the world economy, there has been a financial crisis from time to time taking into account an example of the great depression which occurred in the period of 1930 (Reddy, 2008). But what distinguishes the 2008 financial crisis from the rest was the extent into which it implicated most of the world economy.

Many factors contributed to this position which included flaws in the implementation of policies and problems in micro economics. The global financial crisis can be defined as a result of combined irregularities in global housing and an increase in risk to premia firms, households, and global investors (Taylor, 2009). The occurrence of the global financial crisis in 2008 led to the collapse of investments such as Lehman Brothers. The collapse of industries sent fear in the financial markets with authorities trying to put liquidity directly into financial markets.

This did not help curb the crisis which had already affected the market in a great way. The crisis, at last, brought the worst performance into the global market; most of the industries were deep in recession in the following year. In the year 2009, the global trade volumes were predicted to fall by 13 percent. As a result of these crises, employment levels fell as there was a collapse of industries (Roubini and Nihm, 2010). The crisis hit hard the housing sector in the United States of America which experienced high prices in 2006 and dropped by more than 30 percent in later years. According to the set laws, the responsibility of protecting and stabilizing finances is left to the governments and the Central Banks.

This is intended to be achieved through good supervision and control of the financial markets as well as related institutions. This has led to analyzing what went wrong and could the crisis have been evaded (Roubini and Nihm, 2010). The causes of what the 2008 global crisis need to be looked to know where the policies failed. One of the main causes of the 2008 financial crisis was the failure of the regulatory structures that were in place to keep track of changes that were occurring in financial markets.

References

Bems, R., Dedola, L. and Smets. H. (2007). U.S Imbalances: The role of technology and policies, Journal of International money and Finance, 26(4), 523-45.

DeLong, J. and Olney, M. (2006). Macroeconomics. New York: McGraw-Hill/ Irwin.

Reddy, S. (2008). U.S news: amid pressing problems, threat of deflation looms, Wall Street

Journal, 134-67.

Roubini, N. and Nihm, S. (2010). Crisis Economies: A Crash Course in the Future of Finance.

New York: The Penguin Press.

Taylor, J.B. (2009). Getting Off Track: How Government Actions and Interventions Caused,

Prolonged and Worsened the Financial Crisis. Stanford: Hoover Institution Press.

Williamson, S. (2008). Macroeconomics. Boston: Pearson Education, Inc.

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