Jackson Library

Hot Topics: Business Cycles

The current turmoil in the world financial markets, starting with the U.S. mortgage market, the high oil prices, to the biggest banking collapse in the United States. What can one expect in this economy? The articles below address issues in a way that may prove interesting to you.

Selected articles

Due to contractual arrangements, access to some articles may be restricted to the Stanford community, and subscribers of the "Library Databases" offered through the GSB Alumni's Lifelong Learning Program. Inclusion below does not imply University endorsement of the ideas expressed.

The Chicago Fed National Activity Index And Business Cycles. Chicago Fed Letter, November 2009
Discusses how the Chicago Fed National Activity Index can be used as an indicator of business cycle turning points.
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Recession. New York Times, 10/30/09
There is no official definition of 'recession', so the Times looks at how the NBER addresses the issue.
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Why Do Financial Crises Happen In The Fall? New York Times, 10/28/09
Autumn seems to beget a disproportionate share of American financial crises. But why?
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The Behavior Of Household And Business Investment Over The Business Cycle. Federal Reserve Bank of Richmond Economic Quarterly, Summer 2009
This article describes the main characteristics of the cyclical behavior of household and business investment over the cycle in the United States.
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Business Cycles In The Euro Area. Vox, 1/15/09
Argues that the introduction of the euro has not changed the historical pattern of member countries' business cycle correlations.
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Bad Times Draw Bigger Crowds To Churches. New York Times, 12/13/08
Are bad times good for evangelical churches?
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Depression Economics Returns. New York Times, 11/14/08
When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.
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Old economics for today's crisis. The Toronto Star, 10/20/08
The Great Financial Meltdown would not have surprised the British economist, who died in 1946, for he thought that this was exactly how unregulated markets would behave.
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Can a president tame the business cycle? New York Times, 10/18/08
Many economists contend that presidents have little power over general economic performance during their terms of office ...
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Global business cycles: convergence or decoupling? IMF Working Paper, 2008
This paper analyzes the evolution of the degree of global cyclical interdependence over the period 1960–2005.
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Financier Henry Clews described panics in terms that still ring true. The Wall Street Journal, 9/29/08
Mr. Clews argued that market panics were America's birthright. The country was built on innovation and growth, he said, and growth "requires outlays of capital in advance of obtainable results . . . We thus have a ceaseless stream of new issues of stocks, mortgages and commercial paper and have, therefore, at all times outstanding a large amount of obligations which, from the uncertainty of their basis, are liable to wide fluctuations in value.""As in every preceding crisis, the main cause was far too large a mass of credits -- that is, of debts -- for the amount of cash in which they were redeemable. The cure?
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Black Swans and Minsky Moments. The Philippine Star, 9/29/08
Minsky Moment is named after economist Hyman Minsky. His main contribution to economics was a model of asset bubbles driven by credit cycles, the peak of which is fueled by speculations that end in a tumultuous crisis. He wrote that “a fundamental characteristic of the US economy is that the financial system swings between robustness and fragility, and these swings are an integral part of the process that generates business cycles.” By this explanation, the US subprime crisis fits the model of a Minsky moment.
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Do oil prices directly affect the stock market? FRBC. Economic Trends, 9/12/08
A look at oil prices and the S&P 500 index suggests that there is no correlation.
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The Minsky Moment. The New Yorker, 2/4/08
Twenty-five years ago, when most economists were extolling the virtues of financial deregulation and innovation, a maverick named Hyman P. Minsky maintained a more negative view of Wall Street. ... Wall Street encouraged businesses and individuals to take on too much risk, he believed, generating ruinous boom-and-bust cycles. The only way to break this pattern was for the government to step in and regulate the moneymen.
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Financial Globalization, International Business Cycles and Consumption Risk Sharing. Scand. J. of Economics 110(3), 447–471, 2008
The paper argues that the fraction of idiosyncratic consumption risk that gets shared among industrialized countries has increased considerably
over the period 1980–2000 and, in particular, during the 1990s—from around 30 to more than 60 percent.
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Credit Risk and Business Cycle Over Different Regimes. Working Paper 670, Bank of Italy, 2008
The paper explores the relationship between credit risk and the business cycle.
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Housing, Credit Markets and the Business Cycle. Working Paper 13471, NBER, 2007
The paper discusses the three problems of the housing sector, i.e. 1) a sharp decline in house prices and the related fall in home building; 2) a subprime mortgage problem that has triggered a substantial widening of all credit spreads and the freezing of much of the credit markets; and 3) a decline in home equity loans and mortgage refinancing that could cause greater declines in consumer spending.
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Growth Collapses. Working Paper 136, CID, Harvard University, 2006
The paper investigates 1) the factors associated with episodes where economic growth decelerates to negative rates; and 2) the duration of such episodes.
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Page updated by: Paul Reist. Originally created by Simone Yu.

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