Equity prices have been falling since March 2000. How far can they fall before they reach bottom? The current bear market differs from the mid-1970s plunge in equity prices in terms of the causes and, consequently, the factors that should be monitored to test its progress. In the 1970s, the bear...

We address the issue of whether financial structure influences economic growth. Three competing views of financial structure exist in the literature: the bank-based, the market-based and the financial services view. Recent empirical studies examine their relevance by utilizing panel and...

The anemic U.S. economic recovery and the threat of a double-dip recession stem from the weakness of investment, due to excess capacity created in the euphoric years of the "new economy" bubble. The current imbalances in the corporate sector (i.e., the all-time-high indebtedness in the face of...

The consumer has been on a tightrope since the bursting of the "new economy" bubble, as losses in equity markets have been partly offset by gains in real estate and fiscal support and mortgage refinancing have partly offset increased consumer cautiousness. The consumer will remain on a tightrope...

A continuation of the current policy of bond purchases known as quantitative easing is highly probable under Janet Yellen, who is likely to be confirmed as the successor to Federal Reserve chair Ben Bernanke. The authors assess the probable outcomes for interest rates, which they think will not...

This contribution discusses the origins of the Great Recession and also offers suggestions for possible cures. The focus in explaining the origins of the crisis is on two features: the experience in the us with financial liberalisation is most telling in terms of the cause of the current crisis....