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With the right keywords (and author searches) from earlier papers, I actually found some academic output already; this might not be peer-reviewed yet, i.e. preprints: McKibbin and Fernando (2 March 2020) The Global Macroeconomic Impacts of COVID-19: Seven Scenarios examines the impacts of different scenarios on macroeconomic outcomes and financial ...


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Yes actually many people bothered to study this link. To be more specific the studies are between debt-to-GDP and economic growth (but recession is defined as negative economic growth - more narrowly by NBER as two consecutive quarters of negative growth). Here is a brief summary of the recent literature: Rogoff-Reinhart (discredited) work: As mentioned in ...


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Manias, Panics, and Crashes by Charles Kindleberger (Full book pdf) An easier reading compared to Reinhart and Rogoff. It informally explains how crises occur and presents some famous examples.


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Several articles use data sets on this issue but I am not sure that all the data sets are freely available. Valencia & Laeven (2012) use the IMF country reports to create their data set. It covers all IMF member countries since 1970. EDIT: it is available here, as pointed out by @dismalscience. Reinhart and Rogoff (2009) have 70 countries since roughly ...


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Let me add a couple more references. There's a (very) recent working paper, "The Macroeconomics of Epidemics" by Eichenbaum, Rebelo, and Trabant: http://papers.nber.org/papers/w26882.pdf Slightly older, but still extraordinarily recent is "Fiscal Policy during a Pandemic" by Faria-e-Castro: https://mfariacastro.github.io/files/Covid_March2020.pdf There ...


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One issue is that it is an attempt to fact-check a movie. A movie has an incentive to give a simplistic explanation of the crisis. There are probably hundreds of academic papers on the crisis. The reader is free to do an internet search. The most reliable account that I am aware of in the public domain is a the U.S. Federal Government’s report (which clocks ...


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Lack of liquidity depresses the output and can lead to recessions because it forces otherwise healthy firms to go bankrupt and it also undermines the financial infrastructure of an economy. I think good way of understanding the problem is to explore the difference between illiquidity and insolvency. When firms go bust it is often mainly due to one of the ...


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It's worth differentiating between the financial crisis of 2007-2009, and the recession that began in December 2007. The financial crisis was indeed caused by a run on wholesale funding that was precipitated by significant losses on real estate, both subprime and otherwise. As noted in the first link, stresses in wholesale funding first appeared in August ...


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The primary reason is that it is easier to catch up than it is to forge ahead. India and China have lower GDPs per capita, so they can copy what other countries have done and gain. But the United States, Canada, and Germany can't copy from India or China, as they are already higher. Copying would make them lower. And there's no one higher from whom they ...


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I would like to answer this question by sort of describing what each would start to look like. In an area where the population is aging, the resulting decline in incomes and spending tend to be deflationary because less money is earned and less money is spent, reducing economic activity, also known as Gross Domestic Product. The elderly also sell assets ...


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Deflationary recession refers to a recession in which prices are falling. An example was the Great Depression. Below you have a graph of the yearly rate of change in CPI. A negative number means a fall in prices, i.e. deflation. Shaded areas mean recession period according to NBER. Some argue that deflation was actually a factor contributing towards the ...


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This Time Is Different by Reinhart and Rogoff Detailed, structured, and comprehensive. A brief paper by the same authors on the same topic: This Time is Different: A Panoramic View of Eight Centuries of Financial Crises. The paper's abstract: This paper offers a "panoramic" analysis of the history of financial crises dating from England's fourteenth-...


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It’s a means to an end, and to the mandate that these institutions imposed on themselves. We could also call it an “unofficial” mandate since politicians would likely put pressure on them in indirect ways to uphold their primary mandate. That primary mandate is a 2% inflation target. QE of course expands the money supply which can expand the velocity of ...


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It is not war itself that helps to counteract economic crises, but rather the increased spending needed to support the war. In terms of the evidence to support this claim, Lee Hudson Teslik from the Council on Foreign Relations writes: There is an ongoing debate about the extent to which war spending affects a country’s economy. Experts disagree on the ...


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One of my favorites in this dimension is "This Time Is Different" by Reinhart and Rogoff. Both are respected scholars. The title already suggests what they aim at. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing ...


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There are a lot of differences between the two crises + how these differences manifest in the stock market. First, on the point of the stock market- it's "kinda" an indicator of the overall economy. However, it's not a perfect metric; really, it reflects the weighted sentiment of those who participate. Furthermore, the stock market is more akin to ...


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"...if such a...cycle exists..."---i.e. in economic language, whether liquidity and demand are endogenous to each other. Yes, of course they are. Liquidity (or illiquidity) of any asset can be viewed as an equilibrium outcome where agents confirm each other's beliefs---similar to the liquidity/illiquidity of a bank. As such it has a self-fulfilling ...


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My favorite, and this is my main area of expertise, so I've read many, is Gary Gorton's Misunderstanding Financial Crises: Why We Don't See Them Coming. It's focused on the history in the United States, but it's a tight historical summary of crises framed in a unifying theory. Relatedly, the Yale Program on Financial Stability's Resource Library is a great ...


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Liquidity is a vague term, and it is more useful to talk about other factors that are measurable. However, the theory that a lack of liquidity alone causes investors to shy away runs against the reality that investors were very interested in real estate and private equity — both considered “illiquid” — before 2008. Corporate bonds are always somewhat ...


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The country's funding costs are very low in comparison: at an average of 25 per barrel (in comparison: Russia is funding for 45, the fracking, which is mainly carried out in the United States, costs $ 75 per barrel). So the earnings are above average anyway. The USA, which has become a serious competitor, should give up market share. Today the United ...


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It is because of refinancing. Banks charge interest to cover costs. Among these costs are the costs of delinquent loans. Suppose your bank has lent you X dollars, and your collateral is a house worth X dollars. The bank has some risk of your loan becoming delinquent. If your chance of delinquency decreases, the bank should be willing to let you pay a lower ...


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If a mortaged house decreases its market price after the mortage was made, the bank is in risk in case of default - it might be unable to recover the amount it loaned. In practice this doesn't change the amount you owe to the bank or the monthly payment - you owe the same regardless of the value of the house after making the mortage. I believe the author ...


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Let us put these terms like GDP, GNP and other stated economic indicators aside for a moment. Saying that nations have "developed" is rather a very easy way to address the question of why growth rates have declined. So our problem is low growth right, how do we achieve low growth. I mean we are living in a Utopia, everything is fine, prices are stable and ...


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An Economic bubble "bursts" when we see a sudden drop in price (as you have said in your question). Wikipedia has an appropriate comment on the issue of bubbles being: "...bubbles are often conclusively identified only in retrospect, once a sudden drop in prices has occurred. Such a drop is known as a crash or a bubble burst." Thus Economic bubbles (...


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An economic "bubble" bursts when the buyers in the market deem the good or service to be overpriced. At a certain point, the price of whatever is causing the bubble will reach a certain "threshold price." It is at this "threshold price" that the corresponding amount of "threshold buyers" is reached. These buyers will stop buying (or continue not to ...


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