THE MOST TURBULENT FORTY YEARS IN MONETARY HISTORY– FOUR WAVES OF ASSET PRICE BUBBLES AND FINANCIAL CRISES

Bob Aliber will give a talk on this topic in TCD next Friday April 16, 12.30-2 in Room 3051 of the TCD Arts Block  – all welcome.    Most recently, he had a prominent role in predicting the banking crisis in Iceland, which built on his long research career in the analysis of asset bubbles and crises.

Biography:

Robert Z. Aliber is Professor of International Economics and Finance at the Booth Graduate School of Business at the University of Chicago emeritus. He has written extensively about currencies, international monetary and banking relationships, and financial crises and the credit bubbles. He brought out the fifth edition of Charles P. Kindleberger’s Manias, Panics, and Crashes, (Palgrave, 2005) and is completing the sixth edition. His book the The International Money Game (Basic Books, 1972) first appeared in 1972, and the seventh edition is scheduled for publication in 2010. Other publications include The Multinational Paradigm (MIT Press, 1993) and a book on personal finance, Your Money and Your Life (Basic Books, 1984). A sequel, Your Money and Your Life All Over Again, (Stanford University Press, 2010) is scheduled for publication in 2010. He has consulted to numerous organizations including the Board of Governors of the Federal Reserve System, the World Bank, and the International Monetary Fund. He has testified before committees of Congress, and lectured extensively in the United States and abroad. He received his Ph.D. from Yale University.

17 replies on “THE MOST TURBULENT FORTY YEARS IN MONETARY HISTORY– FOUR WAVES OF ASSET PRICE BUBBLES AND FINANCIAL CRISES”

“Banking” and “crisis”.
Go together like a horse and carriage.
There is a reason for that. Whenever there are economic losers there are often winners as well. As a result, there are those who press for reform and those who, lacking the maturation process of loss, cry “again, Daddy, again!”

Why pretend that we do not know the cause? Because if we admitted the cause, banking would become a public service, regulated at every level. Guaranteed not to fail. With no competitors, because crisis and banking go together!

Few jobs for “professionals” as there would be very little “judgement required”. Less excitement and fewer FIRE jobs, but safe.

We like it so.

http://www.independent.ie/opinion/columnists/martina-devlin/martina-devlin-were-living-in-a-wasteland-because-we-like-it-that-way-2129258.html

There are two sides. Those who make money from banking and those who lose. Whose side are you, dear reader, on?

For those who were there, when Prof Aliber said he thought Greece and Ireland would leave the Euro, was it “for 6 to 18 months” or “in 6 to 18 months”?

(may have been “a year to 18 months”, I’m not totally sure)

Simon,
He said “for”. I heard 6 months as the lower limit of the time period mentioned but didn’t catch the upper limit.
But as Philip later pointed out (and I agree), the transactional costs for leaving the Euro are so great that a restructuring/default might be preferable. I believe a lot of (if not all) creditors would see any attempt to redonominate debt in a new local currency as effective default.

Thanks. Would there be a difference between the two types of default in that a new currency which then devalued might reduce the real value of household and corporate debt where as restructuring/default would only reduce the national debt?

Yes but you have to balance that against capital flight risk. If I knew that my savings are going to be re-denominated in a new soon to be devalues currency I would take the money out of the bank asap and send it abroad. These types of dislocation could have a severe impact. Plus it is not obvious to me that foreign creditors in Euro would accept repayment in the new devalued currency. They might see that as a default anyway.

Ah, I didn’t catch that you were talking about creditors other than holders of government debt in your first reply. Would have been interesting to hear a bit more on this from Prof Aliber!

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