...“The Great Depression (1929-39) was the deepest and longest-lasting economic downturn in the history of the Western industrialized world” (The Great Depression-History.com 2012). The great depression is said to have begun after the First World War, It was a time of hardship and uncertainty. Although the great depression began in the United States it spread throughout the globe and affected almost every country. It brought about drastic declines in output, severe unemployment, and serious deflation. Many countries such as Britain, Germany and France came out of the war with large debts to pay, this was due to the fact that they had been borrowing from The United States of America, after its entrance into financial crisis the rest of the countries depending on its financing would inevitably enter down turn and face similar crisis. World War 1 also left many industrialized countries weak and in large debts, they needed to finance the rebuilding of their economies and industries that were damaged during the war, this made it harder for them to recover. There are a number of explanations to as what brought about the great depression in 1929. These are structural and monetary weaknesses as well as a number of specific events that enhanced the effects from one country to another and eventually to all major industrialized countries. What Caused the great depression? The depression was also said to have partially started with the crash of the stock market in...
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...crashes and so on) and how these countries survived in different times. Furthermore, before I bought this book, I read the brief of the book it sounded interesting, than I wanted to read and to know more about it. Author’s credentials Carmen M. Reinhart is the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics. Previously she was professor of economics at the University of Maryland. She has held a positions in IMF. Kenneth S. Rogoff is the Thomas D. Cabot Professor of Public Policy and professor of economics at Harvard University. He received his PhD in Economics from MIT. He is a commentator for NPR, the Wall Street Journal. And the Financial Times. Carmen M. Reinhart and Kenneth S. Rogoff made a big contribution to financial history, collected data which covered sixty-six countries and different time periods and wrote about financial crisis, inflation,international debt currency crashes and debasements. They are first researches in the history about the financial crisis over many years. The author’s were trying to explain in the book, that ‘This Time is Different’ syndrome is wrong that financial crisis is happening to other countries not to us, because we are doing better as we learn from the past. Summary At the beginning of the book authors is introducing with various crisis and their dates. In the first chapter there are explanations, and definitions, concepts which are relevant with historical economic crisis, inflation, currency...
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...The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in 1930 and lasted until the late 1930s or middle 1940s. It was the longest, deepest, and most widespread depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the world's economy can decline. Cities all around the world were hit hard, especially those dependent on heavy industry. Construction was virtually halted in many countries. Farming and rural areas suffered as crop prices fell by approximately 60%. Facing plummeting demand with few alternate sources of jobs, areas dependent on primary sector industries such as cash cropping, mining and logging suffered the most. Some economies started to recover by the mid-1930s. In many countries, the negative effects of the Great Depression lasted until after the end of World War II. Start Economic historians usually attribute the start of the Great Depression to the sudden devastating collapse of US stock market prices on October 29, 1929, known as Black Tuesday; some dispute this conclusion, and see the stock crash as a symptom, rather than a cause, of the Great Depression. Even after the Wall Street Crash of 1929, optimism persisted for some time; John D. Rockefeller said that "These are days when many are discouraged. In the 93 years of my life, depressions have come and...
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...I. United States of America economic history In order to successfully move forward, we need to look to the past. The country’s economic history is like all history, meaning that it examines and observes the past activities of mankind (Fite 4). The most significant periods in the United States economic history are actually the three centuries before England settled in America. There were four changes happening in Western Europe that have greatly influenced America. Those changes were economic, political, religious, and intellectual (Fite 15). So why were these changes so important? They were the reasons that England decided to explore and expand in the western part of the world. The decision to expand trade and commerce was the most important advancement in the history of economics (Fite 15). From the time that the Virginia colonies were settled in 1609 up until 1890, farming was the most important aspect of the United States economy (Fite 30). Although manufactured products were worth more than products produced on a farm for the first time in 1889, farming was how the majority of Americans made a living (Fite 30). Despite the fact that agriculture dominated in these early years and the industrialization of the colonies was well under developed, “there was a high degree of specialization in the colonial economy” (Fite 63). For example, there were tobacco crops in the southern colonies which were crops that produced money, and in the northern colonies there was international...
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...The Federal Reserve Response to the Recent Recession Rahman R. Funn Webster University BUSN 5620 [ July 23, 2012 ] Ms. Lynn Bailey Abstract This term paper examines the history of the Federal Reserve System and takes a look at what causes a recession and how the FED responded to the most recent one. A recession can cripple a nation if not handled properly. With this paper, I explain how necessary interest rate cuts, the purchase of bonds and mortgage backed securities, and company bailouts were needed to prevent a second Great Depression. These actions will result in the United States creating low, short term-interest rates (near zero) through 2014. The Federal Reserve Response to the Recent Recession This paper examines the history of the Federal Reserve (FED) and how they responded to the recent recession. The goal of this paper is to give the reader insight on the history of the Federal Reserve System and how it was formed. The reader will gain knowledge of what a recession is and how the FED responded to the recent one. The data used for this paper consist of a literature review of articles from the internet websites of NY Times, Federal Reserve. History of the Federal Reserve System (FED) The Federal Reserve System, commonly known as the FED, is the central bank of the United States. Congress established this bank (signed off by President Woodrow Wilson)...
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...Part I: Pre-crisis time, what caused crisis, reasons of collapse In 1920s the economic progress in United States seemed everywhere, as Americans emerged from the self-imposed rationing and sacrifice of World War I and went on a buying spree. Millions of people across the country bought their first everything—their first automobile, washing machine, camera, radio, refrigerator. These products came off America’s assembly lines in an endless stream. More people were at work in U.S. factories and production plants than ever before, producing more goods than ever before. The U.S. economy was sometimes compared to an economic miracle. Consumers in the United States were not the only ones to experience good times. U.S. investors had also had a field day. Overseas, U.S. investments nearly doubled from $3.98 billion in 1919 to $7.5 billion by 1929. The New York Stock Exchange, which served for many as the truest indicator of the nation’s economic pulse, enjoyed phenomenal growth, especially after 1923. Stock purchases on the Exchange increased four-fold between 1923 and 1930. And stock sales were only outstripped by the rise in stock prices. Altogether, investment in the stock market and in bonds rose sharper than any other economic indicator during the decade, faster, in fact, than the actual production or sales of manufactured goods. During the 1920s a would-be investor could make his or her stock purchases largely on credit. Under the rules in place for the New York Stock Exchange,...
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...the onset of the Great Depression to have seen a crisis of this magnitude. People in Japan, it’s true, know all about the “lost decade” after the late 1980s bank crashes – but the late situation is a disaster on a global scale. Great Depression is actually, the outcome of this crisis and is unpredictable. Among other differences, the 1929 stock market crash and subsequent credit crisis led to the Great Depression of the 1930s in part because governments responded with “tight money” policies until too late, an act of suicide which central banks and governments today definitely will not repeat. Quite the contrary, extremely energetic state interventions in Europe and the USA – very much against the recent ideological free-market “run of play” – have halted the fears of a total global banking collapse and the short-term stock market panic. It’s indeed instructive how quickly the entire ideology of “unleashing the free market” and financial deregulation could be thrown aside in order to rescue giant banks that are “too big to fail.” The U.S. Treasury will not only be purchasing (at above-market rates) the “toxic assets” held by these institutions, but pumping hundreds of billions more into them by buying “preferred shares” in them. This means “non-voting shares,” so that the bailout of these collapsing banks still leaves them under private control. There’s the bailout for the corporate and Wall Street incompetents and crooks who helped drive the economic ship into the ground. The...
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...PAUL KRUGMAN WINNER OF THE NOBEL PRIZE IN ECONOMICS THE RETURN OF DEPRESSION E C O N O M CS AND T H E C R I S I S OF I 2 0 0 8 ISBN 9 7 8 - 0 - 3 9 3 - 0 7 1 0 1 - 6 W USA $24.95 CAN. $27.50 hat better guide could we have to the 2008 financial crisis and its resolution than our newest Nobel Laureate in Economics, the prolific columnist and author Paul Krugman? In his prescient 1999 classic, The Return of Depression Economics, Krugman surveyed the economic crises that had swept across Asia and Latin America and pointed out that they were a warning for all of us: like diseases that have become resistant to antibiotics, the economic maladies that caused the Great Depression were making a comeback. In the years that followed, as Wall Street boomed and financial wheeler-dealers made vast profits, the international crises of the 1990s faded from memory. But now depression economics has come to America. When the great housing bubble of the mid-2000s burst, the U.S. financial system proved as vulnerable as those of developing countries caught up in earlier crises—and a replay of the 1930s seems all too possible. In this new, greatly updated edition of The Return of Depression Economics, Krugman shows how the failure of regulation to keep pace with an increasingly out-of-control financial system set the United States and the world up for the greatest financial crisis since the 1930s. He also lays out the steps that must be taken...
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...Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the United States to China. The Great Financial Crisis and the Great Recession began in the United States in 2007 and quickly spread across the globe, which appear to be the turning point of the world history. The recovery plan was set to two year, however the world economy five years after crisis is still in the sluggishness. The Traid – United States, Europe, and Japan remain caught in a slow growth condition, financial instability, and high unemployment rate. As a consequence, the effects spread globally. Despite the slowdown of the global economy, China is the only country found out to be a bright spot as its economy is still expanding. Different views on the Stagnation In the United States, the focus of financial crisis shifted to the idea of economic stagnation. The idea of stagnation was introduced by authorities and published books as follow. Firstly, Ben Bernanke, chairman of Federal Reserve Board said on his speech in 2011 that the stagnation was not affects only the United States, but the global economy as a whole. He moreover stressed that he do not expect the long-run potential growth of the U.S. to be affected by the recession and crisis if the U.S. takes necessary steps to secure the outcome. Nonetheless his thought might sound useful, yet the necessary steps he mention left the public in doubt with no explanation. Secondly, the president of the America Economic Association...
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...stood in shock and fear as Japan initiated their attack on the naval base at Pearl Harbor with absolutely no warning. After the Great Depression of the 1920s, Japan was left without the resources they largely depended on the United States to provide. As Japan’s population became more overcrowded and their resources became scarce, the Japanese military decided to try and take over lands in China; mainly Manchuria. The Empire of Japan was aimed at taking over East Asia. As tensions arose between Japan and China the United States under the leadership of Herbert Hoover and Franklin D. Roosevelt (in the beginning) decided that they did not have any stake siding with either country. Up to this point the United States policy in China was based on the principle known as the Open Door Policy in which any and all countries were free to trade and make investments with and within China. The United States felt that if they sanctioned Japan and China, both economically and with military assistance, it would be enough for Japan and China to stop the fighting, but it didn’t. At that point Japan decided to accept Germany as an ally and began to take over lands governed by the French. The United States responded to these actions by restricting Japan from buying materials from them altogether. Japan relied on the United States for 80% of its oil. Not being able to purchase oil from the United States would absolutely force Japan to give up its efforts to take...
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...Global Economic Crisis The global financial crisis (GFC) or global economic crisis is commonly believed to have begun in July 2007 with the credit crunch, when a loss of confidence by US investors in the value of sub-prime mortgages caused a liquidity crisis. This, in turn, resulted in the US Federal Bank injecting a large amount of capital into financial markets. By September 2008, the crisis had worsened as stock markets around the globe crashed and became highly volatile. Consumer confidence hit rock bottom as everyone tightened their belts in fear of what could lie ahead. The current financial crisis is the worst the world has seen since the Great Depression of the 1930s. For younger generations, accustomed to mild recessions of the new phase of globalization, the misery of the Great Depression is hitherto nothing more than a distant legend. However, the collapse of two Bear Stearns Hedge funds in summer of 2007 exposed what came to be known as the subprime mortgage crisis, reintroducing the world to an era of bank failures, a credit crunch, private defaults and massive layoffs. In the new, globalized world of closely interdependent economies, the crisis affected almost every part of the world, receiving extensive coverage in the international media. “In an Interconnected World, American Homeowner Woes Can Be Felt from Beijing to Rio de Janeiro,” observed the International Herald Tribune at the onset of the crisis. “Chinese Steelmakers Shiver, Indian Miners Catch Flu,” noted...
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... This chapter focuses on the political systems and tools of trade policy. The major objective of this chapter is to describe how political realities shape the international trading system. With an introduction to tariffs, subsidies, and the development of the world trading system, the chapter describes the evolution of the World Trade Organization and its impact on the global business environment. While in theory many countries adhere to the free trade ideal outlined in Chapter 5, in practice most have been reluctant to engage in unrestricted free trade. The US continues to restrict trade in technological and militarily sensitive products as well as in textiles, sugar, and other basic products in response to domestic political pressures. OUTLINE OF CHAPTER 6: THE POLITICAL ECONOMY OF INTERNATIONAL TRADE Opening Case: United States Cotton Subsidies and World Trade Introduction Instruments of Trade Policy Tariffs Subsidies Import Quotas and Voluntary Export Restraints Local Content Requirements Administrative Policies Antidumping Policies Country Focus: Subsidized Wheat Production in Japan Management Focus: U.S. Magnesium Seeks Protection The Case for Government Intervention Political Arguments for Intervention Economic Arguments...
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...previous editions that had been issued by the U.S. Information Agency beginning in 1981. How the U.S. Economy Works The U.S. Economy: A Brief History Small Business and the Corporation Stocks, Commodities, and Markets The Role of the Government in the Economy Monetary and Fiscal Policy American Agriculture: Its Changing Significance (Posted February 2001) Labor in America: The Worker's Role Other Language Versions: Foreign Trade and Global Economic Policies Afterword: Beyond Economics Glossary Executive Editor: George Clack | Editor: Kathleen E. Hug | Art Director: Barbara Long Illustrations: Lisa Manning | Internet Editor: Barbara Long This site is produced and maintained by the U.S. Department of State's Bureau of International Information Programs. Links to other internet sites should not be construed as an endorsement of the views contained therein. Home | About USINFO | Site Index | Webmaster | Privacy Topics | Regions | Resource Tools | Products | | Continuity and Change How the U.S. Economy Works The U.S. Economy: A Brief History Small Business and the Corporation Stocks, Commodities, and Markets The Role of the Government in the Economy Monetary and Fiscal Policy American Agriculture: Its Changing Significance Labor in America: The Worker's Role Foreign Trade and Global Economic Policies Afterword: Beyond Economics Glossary CHAPTER 1 Continuity and Change The United States entered the 21st...
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...ISCOR 300 Spring 2014 Tuesday 4:00-6:00pm Exam Study Guide IDs: You should be able to identify major terms, concepts, events, and people. A good ID response requires that you state who or what it is, AND its significance in the context of the course (how, why important? The so what question). Study suggestion: go through the readings and video, lecture, and discussion notes; make an extended list of potential candidates (20-25). Choose 10-15 to concentrate and focus on in relation to what a good ID should be. YOU WILL HAVE A LARGE NUMBER OF IDs TO CHOOSE FROM, 5 out of 10-12. Each ID will be worth 10 points, for a total of 50 points. FOR EXAMPLE, in a class dealing with international security, an ID for Aum Shinrikyo would be as follows: Aum Shinrikyo was an apocalyptic Japanese religious cult that released sarin nerve gas in the Tokyo subway in 1995, killing 12 and injuring over 5,000. The ultimate goal of the cult was to bring about chaos on an international scale culminating in a nuclear war, as a means of ushering in the apocalypse. The 1995 attack was an effort to test methods of dispersing chemical weapons, a step towards achieving that goal. Significance: Aum Shinrikyo was the first non-state actor to successfully carry out a large-scale chemical weapon attack against civilians. The cult illustrates a new face of terrorism, post-modern terrorism. Post-modern terrorism is defined as groups without specific political or sub-national...
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...Abstract SiemensAG - a major international corporation , an independent company working in the field of electrical engineering, electronics , power equipment, transport engineering, medical equipment and lighting , as well as specialized services in various fields of industry, transport and communications. Headquartered in Berlin and Munich (Germany) . Basically, the company most widely represented in three sectors : industry, energy and healthcare sectors . The company's shares are included in the calculation base of the following stock indices : DAX, S & P Global 100 , Dow Jones EuroStoxx 50 , Dow Jones Stoxx 50 , Dow Jones Global Titans 50 . The company has a decentralized structure : the responsibility for work in the world market rests with the 14 departments . In various countries, commercial purpose departments implement regional representation. Siemens is known worldwide , not only as a reliable manufacturer and innovator in many areas of industry. For nearly 160 years, Siemens has sought to use the most innovative materials and technologies , bringing a great contribution to the development of world progress , coming up with new technologies and devices . Us she is more known for its quality line appliances - from irons to refrigerators , and in industry it is famous for lighting systems , electronic systems, air-conditioning and ventilation installation , etc. Today by Siemens is one of the largest electrical and electronic companies in the world . The company employs...
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