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Financial Cycles

Sovereigns, Bankers, and Stress Tests

  • Authors
  • Dimitris┬áN.┬áChorafas

Table of contents

  1. Front Matter
    Pages i-xv
  2. Dimitris N. Chorafas
    Pages 1-24
  3. Dimitris N. Chorafas
    Pages 25-42
  4. Dimitris N. Chorafas
    Pages 43-68
  5. Dimitris N. Chorafas
    Pages 69-87
  6. Dimitris N. Chorafas
    Pages 89-107
  7. Dimitris N. Chorafas
    Pages 109-130
  8. Dimitris N. Chorafas
    Pages 131-152
  9. Dimitris N. Chorafas
    Pages 153-174
  10. Dimitris N. Chorafas
    Pages 175-193
  11. Dimitris N. Chorafas
    Pages 195-217
  12. Back Matter
    Pages 219-242

About this book

Introduction

As financial positions expand, the economy becomes more vulnerable to adverse and unexpected developments taking place outside the six to seven year business cycle. Over 50 years ago Nikolai Kondratieff developed the theory of "The Long Waves in Economic Life", which incorporated an extended cycle of innovation and upward thrust, and changed our understanding of business cycles in financial settings. Financial Cycles concentrates on two areas that have thus far been omitted from mainstream economics. The first is the impact of the longer term financial cycle; the second is the beginning of de-globalization as the world enters an era of iron-glad economic blocks. Chorafas argues that to overcome the more narrow limits of the business cycle, we need to go beyond its traditional six to seven year focus and address the longer term. This includes the building-up and running-off of economic risks characterizing the financial cycle, as well as the appreciation of forces underwriting both its growth and its decay. An ever-increasing public debt and the behavior of the banking industry are two principal reasons why the structure of analysis characterizing the previous financial cycle no longer fits present-day realities. A new methodology starts getting in shape, even if it still has to acquire political legitimacy.

Keywords

Financial cycles business cycles sophisticated economy fermentation management of financial cycle Financial stability Financial Stability Board Today's problems sovereign budgets western economies Globalization de-globalization reserve currencies monopoly money unfunded liabilities Transatlantic Trade and Investment Partnership (TTIP) IMF BRICS Deleveraging Disinflation banking Banking Industry debt sustainability globalization Inflation investment monetary policy trade

Bibliographic information