The paper illustrates how the Government role has recently evolved, specifically focusing on the 2008 financial crisis. First, we analyze the Government responsibilities in triggering the crisis, by bloating the supply of credit. We discuss emerging countries’ expansionary monetary policy, in many cases aimed at defending their export, thereby directing huge savings flows towards developed countries. We then expound the role of the US housing and monetary policies, as well as other countries’ policies, particularly regarding financial deregulation. Second, we deal with some critical aspects of Governments’ intervention in the aftermath of the crisis. We show the negative impact of a number of policies, particularly in the accounting field, which contributed to exacerbating the tendency to an inefficient allocation of the available capital, where an excessive weight has been placed on low-risk assets, resulting in a slowdown of economic growth. Finally, we use a simple game theoretic model to emphasize the need for an internationally coordinated financial regulation policy.

New Forms of Government Intervention in the Era of Global Imbalances

BOFFA, FEDERICO;
2011-01-01

Abstract

The paper illustrates how the Government role has recently evolved, specifically focusing on the 2008 financial crisis. First, we analyze the Government responsibilities in triggering the crisis, by bloating the supply of credit. We discuss emerging countries’ expansionary monetary policy, in many cases aimed at defending their export, thereby directing huge savings flows towards developed countries. We then expound the role of the US housing and monetary policies, as well as other countries’ policies, particularly regarding financial deregulation. Second, we deal with some critical aspects of Governments’ intervention in the aftermath of the crisis. We show the negative impact of a number of policies, particularly in the accounting field, which contributed to exacerbating the tendency to an inefficient allocation of the available capital, where an excessive weight has been placed on low-risk assets, resulting in a slowdown of economic growth. Finally, we use a simple game theoretic model to emphasize the need for an internationally coordinated financial regulation policy.
2011
Internazionale
http://revel.unice.fr/eriep/index.html?id=3222&format=print
File in questo prodotto:
File Dimensione Formato  
Offprints ERIEP.pdf

accesso aperto

Tipologia: Documento in post-print (versione successiva alla peer review e accettata per la pubblicazione)
Licenza: DRM non definito
Dimensione 1.05 MB
Formato Adobe PDF
1.05 MB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11393/74038
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact