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CAUSES OF THE WORLD FINANCIAL CRISIS OF 2007 -2009 AND THEIR IMPLICATIONS FOR MONETARY POLICY (Przyczyny swiatowego kryzysu finansowego w latach 2007 - 2009 i implikacje dla efektywnosci ) polityki pienieznej

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Holubowicz L.

Optimum. Studia Ekonomiczne

2011

issue 3(51)

147-162

The purpose of this paper is two-fold. First, it attempts to determine the causes of the financial crisis that occurred between 2007 and 2009. Second, the author gives an answer to the question of what systemic changes should be introduced to avoid a similar scenario in future. To pinpoint the causes of the crisis, a method based on verification of scientific hypotheses is used. The process of verification allows one to assert that the subprime crisis which started in the USA was caused by both introduction of the National Homeownership Strategy in 1993 and too low interest rates. As for the second problem, a good solution can be the introduction of a new monetary policy instrument. Central bank's new interest rate should determine a minimum level of mortgage loans regardless of the price of money on the interbank market.

THE SPECULATION BUBBLE ON THE REAL ESTATE MARKET IN THE USA IN VIEW OF SELECTED OVERINVESTMENT THEORIES (Problem banki spekulacyjnej na rynku nieruchomosci w Stanach Zjednoczonych w swietle wybranych teorii przeinwestowania)

100%

Bochenek P.

Finansowy Kwartalnik Internetowy e-Finanse

2011

vol. 7

issue 1

79-95

This paper offers a specific analysis of speculation bubbles in the economic history of the world, and then tries to identify the causes and effects of the speculation bubble on the real estate market in the USA, which was the main cause of the subprime crisis. The first part of the paper aims at defining the phenomenon of economic fluctuations and speculation bubble and presenting the most popular theories of overinvestment, which emphasize the importance of speculation phenomenon. The next part of the article describes direct causes of subprime crisis. Special attention has been paid to the processes taking place on the real estate market in the USA in the past fifteen years. The final section of the paper is a synthesis of theorems by the economists of Austrian School and Hyman Minsky, and then confronting them with real processes in the US economy in recent years.

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1 Finansowy Kwartalnik Internetowy e-Finanse

1 Optimum. Studia Ekonomiczne

2 2011

1 Bochenek P.

1 Holubowicz L.

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CAUSES OF THE WORLD FINANCIAL CRISIS OF 2007 -2009 AND THEIR IMPLICATIONS FOR MONETARY POLICY (Przyczyny swiatowego kryzysu finansowego w latach 2007 - 2009 i implikacje dla efektywnosci ) polityki pienieznej

THE SPECULATION BUBBLE ON THE REAL ESTATE MARKET IN THE USA IN VIEW OF SELECTED OVERINVESTMENT THEORIES (Problem banki spekulacyjnej na rynku nieruchomosci w Stanach Zjednoczonych w swietle wybranych teorii przeinwestowania)