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OUR ECONOMY

Financial Crises in Comparative Perspective – Crisis Management and its Phenomenon of Repetition/Return

Sebastian Zemla

Abstract


Crises cause attentiveness in our society and awaken, depending on the degree
of consternation, our ongoing interest. These events include financial crises,
phenomenal incidents that shock the economic world and pose significant
challenges for the governments. Two crises which stand out in this context are
the Great Depression in 1929 and the financial crisis in 2007/2008. In addition
to the comparative approach, the paper focuses directly on the typical repetitive
mechanism (“recurrent pattern of banking and sovereign debt crises” (Reinhart
& Rogoff, 2011): overheating, the forming of a bubble and the bursting of the
bubble, largely started in the USA. Specific aspects included in this research area
are crisis management in the decades mentioned above, the role of governments
and banks, as well as the observation as to which crisis can be expected next.
We can conclude that the current monetary systems led by complex financial
instruments and addicted to low interest rates are prone to deliver another
serious financial crisis.


Keywords


financial crises, comparison of crises, crisis management, government measures, future inevitability

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