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Prof. Dr. Ftima de la Fuente del Moral

Financial Crisis through History

Seminar (talk plus written presentation)Scheduled Thursday 14.00 till 17.15, first time Oct. 17, 2013; break for preparationPresentations at Nov. 21, Dec. 12, and Jan. 16 (limited to 20 participants)4 SWS, 4 ECTS

The student should learn about financial crises during history by doing some re-search and presenting it orally. A professional PowerPoint presentation should bepresented as the written version.

Suggested topics can be found in the enclosure. Further topics are possible by mu-tual agreement.

No standard literature, please perform own research, cf. list of topics

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Seminar topics logist ics, fall and winter 2013-14

MAD CROWDS, DELUSIONS AND ECONOMIC CRISISALONG THE HISTORYProf. Dr. Ftima de la Fuente del Moral

In this seminar, our aim is to analyse in depth the reasons that took the society toeconomic crisis in different times of the past.

The final objective is that students, after making a deep reflection, will be able toidentify similarities with the current crisis. The final idea is to discover if we can learnfrom the History (having an economic approach to it) to overcome the present situa-tion as well as to try to avoid the origination and development of new crisis.

In the first day, the Professor will explain the mechanisms that took us to the 2007subprime crisis. After that, each student has to choose one topic for his or herpresentation. Alterations or new topics are allowed. Foreign students are encouragedto present a topic related to his or her country. Please consult the lecturer.

As follows, please find suggested topics:

1. The tulipmania(Holland, 17th century)

What happened with tulip bulbs? Can we find a connection with the Real Es-tate industry in the 21stcentury?

Speculation in the past. Any similarity with present days? Rembrandt was a NINJA (No Income, No Job, No Assets)

2. John Law, paper money and the debt-equity swap (France, 18th century)

Paper money and the debt-equity swap Who was John Law? John Laws economic system The Mississippi Bubble

The bubble blows up Comparison with the 2007 economic crisis

3. The mystery of Easter Island

Clans competed to build more moaifor social and religious prestige Used large amount of labor and natural resources (500 people worked on 1

statue) Depleted natural resources Civil war Complete economic collapse Natural resources ran out and economy collapsed Financial and Real Estate speculation

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4. The South see company and speculative financial bubbles (England, 18th

century)

National (sovereign) debt and the existence of public-private partner-

ships (PPPs) Monopolies of trade

Economics and war (War of the Spanish Succession)

Speculation in Stock Exchange The South See bubble

Insider trading already existed in the 18thcentury

and so did corruption: Bribery among politicians

5. 1929: Who needs more words?

The 1929 stock market crash and stock market crashes (Differencesand similarities)

Looking for an origin: the roaring twenties, time of wealth and excess(Does it sound familiar to us?)

The dangers of speculation

The Great Depression and the 2007 Great Recession

World War II: Does it have anything to do with this economic crisis?

6. The Latin American debt crisis of the 1980s

Was it a debt crisis?

Industrialization, infrastructure and lots of money to borrow

The World Bank, the oil-rich countries and the dictatorships behindLatin Americas debt of the 80s

The increase of the interest rates and the intervention of the Interna-tional Monetary Fund

Economic stagnation, unemployment and a new strategy: From importsubstitution industrialization to export-oriented industrialization (en-couraged by the IMF)

The austerity plans suggested by the IMF to Latin America in the 80sand the role of the TROIKA in the UE in the 21stcentury

7. The monetary policy and liquidity traps: The experience of Japan in the1990s

The liquidity trap and the Keynesian economics

Inflation and deflation. Which one is worse?

The Pigoueffect

The Bank of Japan in the 1990s and the quantitative easing

Is it possible to have stagnation with near-zero interest rates?

Buying bonds with newly created cash The dilemma of the Europe-an Central Bank and the bailout programs of Greece, Portugal andIreland

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8. The 1997 Asian crash

Economic crisis and financial contagion

The Tom Yum Kungcrisis

Fixed exchange rates and foreign currencies: The Thai bath collapse Do countries go bankrupt in the 21

stcentury or into a Suspension ofPayments (Chapter 11) instead? Can high levels of foreign debt takecountries to bankruptcy? Are there any examples in the World econ-omy?

Were the Structural Adjustment Packages of the International Mone-tary Fund well designed to stabilize currencies within the area?

Existing high interest rates of developing countries of South-East Asiaand hot speculative money

The transformation of the so-calledAsian miracleinto the collapse ofcurrencies and other asset prices

9. Financial innovation and economic crisis along the History

Credit Default Swaps and Debt Equity Swaps Did they exist beforethe 21stcentury?

Hedge funds and hedge funds distressed Have they played a star-ring role in the 2007 subprime economic crisis?

Doing banking in the shadow Is it an invention of nowadays?