Financial Cycles

Financial Cycles

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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 qThe Long Waves in Economic Lifeq, 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.... have short memories and by 2014 the transformation of mortgages, credit-card receivables, automobile debts, student ... On July 28, 2014, Lloyds Bank paid a penalty of Ap226 million ($384 million) to the Bank of England to settle with the US anbsp;...

Title:Financial Cycles
Author:Dimitris N. Chorafas
Publisher:Palgrave Macmillan - 2015-03-12


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