balance sheet recession Concepts

Paper Promises

by Philip Coggan · 1 Dec 2011 · 376pp · 109,092 words

be able to find profitable projects that earned more. But Japan showed that was not necessarily the case. In Koo’s view, Japan suffered a balance-sheet recession, in which companies found that their assets were worth less than their debts. The last thing they wanted was to borrow any more. Instead, low

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All

by Martin Sandbu · 15 Jun 2020 · 322pp · 84,580 words

. Irving Fisher, “The Debt-Deflation Theory of Great Depressions,” Econometrica 1, no. 4 (1933): 337–57; Richard Koo, “Balance Sheet Recession Is the Reason for ‘Secular Stagnation,’ ” VoxEU, 11 August 2014, https://voxeu.org/article/balance-sheet-recession-reason-secular-stagnation. 14. See Robert Shiller, Finance and the Good Society, Princeton, NJ: Princeton University Press, 2012

Expected Returns: An Investor's Guide to Harvesting Market Rewards

by Antti Ilmanen · 4 Apr 2011 · 1,088pp · 228,743 words

be stronger when Fed tightening causes recessions and Fed easing leads the recovery, typical features of postwar business cycles. The story may be different in balance sheet recessions caused by financial de-leveraging, as in the 1930s and 2008, where the Fed has less power to affect the economy. Not surprisingly, many firms

…

cycles differ in their depth and duration. The most important contrast is between typical post-World War II recessions, arguably caused by Fed tightening, and balance sheet recessions, caused by de-leveraging after financial excesses (as in the 1930s and 2000s); the latter are more severe. It is also interesting to observe how

Crisis Economics: A Crash Course in the Future of Finance

by Nouriel Roubini and Stephen Mihm · 10 May 2010 · 491pp · 131,769 words

, and even the corporate sector. The recession wasn’t driven by monetary tightening; it was a “balance sheet” recession driven by a staggering accumulation of debt. Recent research by Carmen Reinhart and Kenneth Rogoff suggests that a “balance sheet” recession can lead to a weak recovery, as every sector of the economy “deleverages” and cuts down

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth

by Michael Jacobs and Mariana Mazzucato · 31 Jul 2016 · 370pp · 102,823 words

Financial Instability Hypothesis, Levy Economics Institute Working Paper No. 74. 13 Richard Koo of Nomura Research has popularised this dynamic as a ‘balance sheet recession’. See R. Koo, ‘The world in balance sheet recession: causes, cure, and politics’, Economic Review, issue 58, http://www.paecon.net/PAEReview/issue58/Koo58.pdf (accessed 4 May 2016). 14 J

…

-hatzius-on-sectoral-balances-2012-12?IR=T (accessed 4 May 2016). 18 M. Wolf, ‘The balance sheet recession in the US’, Financial Times, 19 July 2012, http://blogs.ft.com/martin-wolf-exchange/2012/07/19/the-balance-sheet-recession-in-the-us/ (accessed 4 May 2016). 19 P. McCulley, Global Central Bank Focus: Facts

…

sheets. For a full treatment, see W. Mitchell and L. R. Wray, ‘Introduction to monetary and fiscal policy operations’, Chapter 9. 23 As Wolf (‘The balance sheet recession in the US’) notes, ‘the financial balance of the private sector shifted towards surplus by the almost unbelievable cumulative total of 11.2 percent of

War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt

by Kwasi Kwarteng · 12 May 2014 · 632pp · 159,454 words

financial panic. In the modern jargon beloved of today’s economists and journalists, Keynes initially identified the Great Depression as a phenomenon akin to a ‘balance sheet recession’. He continued his assessment that the ‘assets of banks in very many countries – perhaps in all countries with the probable exception of Great Britain – are

…

, 342–3, 356 auto manufacturers, 315 autobahns, 133 Aztecs, 13, 22 Bagehot, Walter, 62–5, 79, 99, 127, 164, 170 ‘bailouts’, 329 Baker, Howard, 250 ‘balance sheet recessions’, 129 balanced budgets, commitment to, 6–7, 234, 245, 296, 358 Japan and, 193–4 US and, 162–3, 168–70, 202–4, 207, 209

Stolen: How to Save the World From Financialisation

by Grace Blakeley · 9 Sep 2019 · 263pp · 80,594 words

” — the kind of reverse economic multiplier caused when governments, households, or businesses cut their spending. This effect is exacerbated during what Richard Koo calls a “balance sheet recession”, caused by excessive lending. But others argue that the paradox of thrift can’t explain sluggish growth on its own, not least because the slow

The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse

by Mohamed A. El-Erian · 26 Jan 2016 · 318pp · 77,223 words

, various explanations have been put forward for this unusual and worrisome phenomenon—from the difficulties of escaping a liquidity trap and the challenging aspects of balance sheet recessions to a change in productivity trends, lack of infrastructure investment, the effects of debt overhangs, demography, and “the race against the machines.” These are all

The Man Who Knew: The Life and Times of Alan Greenspan

by Sebastian Mallaby · 10 Oct 2016 · 1,242pp · 317,903 words

financially induced.28 Half a century after Greenspan wrote these paragraphs, the world succumbed to another violent stock market decline, and economists pronounced learnedly on “balance-sheet recessions”—ones that follow a crippling destruction of wealth rather than a mere falloff in spending. The pronouncements were frequently coupled with denunciations of the Greenspan

…

Fed: if only Greenspan had understood balance-sheet recessions and how painful they could be, he surely would have acted more decisively as the bubble of the 2000s inflated. But the truth, as revealed

…

in Greenspan’s 1959 paper, is that he had been thinking about balance-sheet recessions for decades—in fact, he had been aware of them for longer than many of his critics had been breathing. The fact that he nonetheless

…

the doves on the Federal Open Market Committee were turning out to be right. The United States was experiencing what economists would later call a balance-sheet recession.31 In mid-December, with the economy still weak, Treasury Secretary Nicholas Brady seized a chance to push Greenspan to ease faster. Manley Johnson, the

…

was sufficiently developed that even the best critiques of his policy during 1990–91 do not explain where he went wrong. Looking back on the balance-sheet recession a year later, Ben S. Bernanke, the Princeton professor who had commented so thoughtfully on Black Monday, proposed a rethink of how money affected the

…

cited were John Gurley and Edward Shaw, the authors who had influenced Greenspan in the 1950s.68 If Greenspan was intellectually equipped to anticipate the balance-sheet recession, why did he nonetheless miss it? In another painful irony, the empiricist who prided himself on his command of data turned out to be short

…

lending.” See Ben Bernanke, “Credit in the Macroeconomy,” Federal Reserve Bank of New York Quarterly Review 18, no. 1 (Spring 1993): 64. 31. The term “balance sheet recession” was used in a retrospective colloquium on the 1990–91 downturn, organized by the New York Federal Reserve in February 1992. However, the term was

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity

by Joseph E. Stiglitz · 28 Jan 2020 · 408pp · 108,985 words

33 percent for Greece, 62 percent for Portugal, and 50 percent for Spain. ¶ That was why the 2008 recession was often referred to as a balance-sheet recession, but it was, of course, much more than that. # As we noted in Chapter 2, the Single Market without deposit insurance and other elements of