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Thus, financial repression is most successful in liquidating debts when accompanied by inflation and can be considered a form of taxation, [6] or alternatively a form of debasement. [7] The size of the financial repression tax was computed for 24 emerging markets from 1974 to 1987. The results showed that financial repression exceeded 2% of GDP ...
[1] [2] In particular, he researched international trade and finance, economic development, monetary theory and policy; money and banking. [3] McKinnon is best known for developing the theory of "Financial repression" in 1973, working alongside his colleague Edward Shaw. [1] [4] [5]
Economic repression comprises various actions to restrain certain economical activities or social groups involved in economic activities. It contrasts with economic liberalization . Economists note widespread economic repression in developing countries .
Investors Worried about Financial Repression as Policy Decisions Drive Global Markets Survey results show more than 66% of investors want asset managers to prioritize a deeper understanding of the ...
Debt deflation is a theory that recessions and depressions are due to the overall level of debt rising in real value because of deflation, causing people to default on their consumer loans and mortgages. Bank assets fall because of the defaults and because the value of their collateral falls, leading to a surge in bank insolvencies, a reduction ...
[10] [5] [2] Through the lens of Keynes's General Theory, Krugman analyses the economic crisis of Asia and Latin America, incorporating the usual Keynesian elements: a liquidity trap, rejection of orthodox economics, chronically volatile financial markets and mistreatment of aggregate demand/supply.
A big financial crisis will accelerate the cuts and turn the recession into a potential depression. That is, of course, what happened in 2008. The effects of the emergence of balance-sheet constraints on spending and borrowing will, in brief, be revealed in the huge financial surpluses in the private sectors of crisis-hit economies." [6]
The internal contradictions of capital accumulation is an essential concept of crisis theory, which is associated with Marxist economic theory. While the same phenomenon is described in neoclassical economic theory, in that literature it is referred to as systemic risk. [1] [2] [3] [4]