SCHOOL OF HUMANITIES AND SOCIAL SCIENCES

HE 312: Political Economy of East Asia

TOPIC:

- WHY HAS THE 2008/2009 GREAT RECESSION NOT DEVELOPED INTO

THE WORLD DEPRESSION?
- CRITICALLY DISCUSS THE POLICY TOOLS EMPLOYED IN FIGHTING
THE GREAT RECESSION.
- GOING FORWARD, ASSESS THE RISK OF A W-SHAPE RECOVERY.

DONE BY: IVAN LOUISE BARUS (U0930207H)

CHRISTIN DJUARTO (087628G20)

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Table of Contents

Page

1. Introduction...............................................................................................................3

2. Why has the Great Recession not developed into Great Depression? ......................3

3. Policy tools employed in fighting the Great Recession ............................................5

3.1 Expansionary Monetary Policy ..........................................................................5

3.2 Expansionary Fiscal Policy ................................................................................7

3.3 Global Cooperation in International Trade and Exchange Rate policies ...........9

4. Risk of W-Shape Recovery.....................................................................................11

4.1 Existing Debt Problem (Case Study: Euro zone).............................................11

4.2 Premature Withdrawal of Fiscal Stimulus (Case Study: Euro zone, US) ........12

4.3 Risk of Liquidity Shift and Asset Bubble (Case Study: Asia) .........................14

4.4 Threat of Protectionism and Competitive Devaluation....................................16

5. Conclusion ..............................................................................................................16

6. Appendix.................................................................................................................17

7. References...............................................................................................................28

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1. Introduction

The Great Depression in the 1930s was the most traumatizing economic

depression in the world. It started in the U.S. due to the event of stock market crash

and affected the whole world be it rich or poor countries. Personal income,

government tax revenue, profit and world trade fell significantly. In the United States,

the economy was extremely grim with 50% percent of banks experiencing failures

and all-time high unemployment rate of 25 %. The economy shrunk by 26.5%, prices

decline by 25% and the Dow Jones industrial average dropped by 89.2% (Lim, 2010).

Many fear that 2008 Global Recession could degenerate into the same

condition of the Great Depression. However, learning from the Great Depression

experience, governments today are able to avoid mistakes that policy-makers made in

the 1930s. Engaging in trade protectionism, contractionary fiscal and monetary

policies in the 1930s prolonged the Great Depression and delayed the global

economic recovery. In the present day, policy-makers take more appropriate measures

of open trade and expansionary policies to stimulate the economic recovery. Until

today, the recession has been prevented from degenerating into Great Depression, but

there remain concerns about the risk of W-shape Recovery.

2. Why has the Great Recession not developed into Great Depression?

The recession in 2008/2009 originated from the USA. Sub-prime loan in the

mortgage industry, also known as Ninja loan, was massively issued to unworthy

borrowers with no income, no jobs and no assets. By March 2007, the value of sub-

prime mortgages in the U.S. had reached $1.3 trillion. There was sharp increase in

sub-prime lending and home ownership (Figure 1). Huge bubble was created in the

housing market (Figure 2) because banks practiced easy lending policies. U.S.

investment banks leverage ration indicated their increased risks (Figure 3). This

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situation was initially not a problem because value of housing assets continues to rise

with the housing boom. Unfortunately, the bubble finally burst and value for housing

assets fell tremendously below the value of mortgage. Many debtors had trouble

paying their loans, and the matter was grim because Ninja loans were also extended to

various other loans. These resulted in failures of many huge American financial

institutions. The credit crisis spread to other sectors such as the automobile industry

and due to global connectivity, the crisis spread easily to other countries, thus global

recession.

This recession, fortunately, did not develop into world depression because of

various reasons. Global cohesion in taking similar view and approach in handling the

economic problem has successfully averted the recession from developing into global

depression. Many countries voluntarily implemented proper combination of

expansionary monetary and fiscal policy. Learning from the Great Depression,

governments of various countries also restrain from engaging in protectionist policies.

In the recent recession, U.S. GDP shrunk by 2 % and unemployment reach 9.6%

(Lim, 2010). However, as compared to the Great Depression, these figures are milder

and they show that global recession is not as severe as the condition of the Great

Depression.

Nonetheless, there are different economic conditions and different levels of

commitment of different countries in adopting anti-recession policies. Hence,

although the view and policies on how to handle the situation is united, the results

differ for different countries.

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3. Policy tools employed in fighting the Great Recession

3.1 Expansionary Monetary Policy

Learning from the 1930s where tight monetary policies have worsened the

depression, many governments today engage in an expansionary monetary policy as

one of the tools to ease the recession. This policy is implemented by increasing

money supply in the economy and reducing the interest rate in the country. These

policies aim to break expectation of deflation, stimulate the economy and reduce

unemployment.

Contracting economy usually faces falling demand and deflation problem,

hence increasing money supply essentially helps to put expectation of price stability

or even pump in inflationary pressure, and reduce interest rate. Lower interest rate

means cost of borrowing and investment is reduced. Such policy may seem ironic

because the recession is originated from borrowing problem. Nevertheless, many

governments had taken the step to reduce interest rate as this is hoped to encourage

people to increase consumption and investment activities, hence stimulating the

economy. Discount rate and inter-bank rates are at time brought to near zero in 2010

(Figure 4). In some European countries, after taking account inflation, the real interest

rate even lead to negative values. In major economies, interest rate hover between

zeros to two percent.

In countries with initially high interest rates, reducing the interest rate seems

to be a reasonable and effective way to gain the impact from monetary policy.

However, some countries might be in Liquidity Trap with almost zero interest rates,

for instance Japan and United States. With Liquidity Trap, monetary policy is

ineffective and reduction of interest rate will only give small effect in stimulating the

economy. Uncertainty of future economic situation causes individuals and firms to

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tend to be more careful in spending and more inclined towards saving for unforeseen

circumstances in the future. It is believed that many developed countries that

represent almost 70% of world GDP are facing this problem of liquidity trap.

Realizing this problem, the U.S. government chose to respond to the crisis by

engaging in a practice of Quantitative Easing (QE). Unlike QE approach that at times

had been adopted by Japan and some other countries, U.S. policy is distinguished and

can be better described by Credit Easing. This is because the policy is not only

directly targeted to the growth of monetary base but it is also concerned with

allocation of credit to the financial system. This credit-easing policy reallocates credit

and attends to great demand for liquidity. In March 2009, U.S. Federal Reserve

announced that they would be pumping $1.2 trillion into the market. Much of the

rescue operations are directed to purchase large U.S. Treasury and agency debt and

mortgage-backed securities, aiming to promote recovery of housing and financial

market. Even so, the U.S. monetary base is increased, and unlike reduction in interest

rate, this policy does not face Liquidity Trap problem. Increase in monetary aggregate

helps to setup more stable prices, and keep the economy going.

However, problem can arise from this policy if the money injected is used to

buy bonds and not to directly stimulate job-creating industry. This results in slow

reduction in unemployment in U.S. (Figure 5). Also, loose monetary policy plays a

part in U.S. Dollar depreciation against other currencies (Figure 6) and this can

jeopardize the global economy as U.S. Dollar depreciation provokes other countries to

turn to competitive devaluation. Competitive devaluation will be further discussed in

later part of this paper.

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3.2 Expansionary Fiscal Policy

Monetary policies are not enough to prevent the recession from escalating into

depression. For some countries, monetary expansion might be beneficial in

stimulating the economy but for other countries, especially the ones with liquidity trap

problem, it not sufficient. Expansionary fiscal policy needs to be implemented

simultaneously with those monetary policies.

Expansionary fiscal policy aims to boost aggregate demand by increasing

government spending or reducing the tax rate. Fiscal policies are more direct ways to

stimulate the economy and hence are viewed to be more effective remedy for

recession. In the case of recent global recession, governments from various countries

responded to the situation with huge fiscal stimulus packages, which consequently

engage themselves in a practice of maintaining budget deficits (Figure 7). Projects are

put in place by the government to stimulate demand and to create jobs.

U.S. put forward $152 billion Economic Stimulus Act of 2008 to boost the

economy and passed stimulus package as huge as $787 billion in the American

Recovery and Reinvestment Act in 2009. There are also many other bills that amount

U.S. fiscal spending to over a trillion dollar. In London Summit 2009, G20 nations

pledged to stimulate the economy by a total of 2 trillion dollars of global fiscal

expansion. China and India just recently announced their planning to further spend

$570 billion and $406 billion respectively in years ahead as part of their stimulus

package in combating the recession. Those stimulus packages that had been

administered were proven to be effective in stimulating the economy. Growth rates of

many countries and overall world economic growth had climbed back to recovery

(Figure 8).

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 However, fiscal stimulus has its own drawback as many countries face

difficulties in financing stimulus packages. Huge fiscal spending means that the

country needs to run on budget deficit and source for different financing methods.

In countries with huge foreign reserves such as China, India, Japan and

Singapore, financing deficit does not pose significant problem. However, countries

with poor reserves accumulation need to resort to other financing methods. Increasing

government revenue by taxation will only worsen the recession and sales of

government assets during recession period will not bring in much revenue due to low

demand and prices. Printing more money to finance deficit also brings high

inflationary pressure and leads to depreciation of the currency. This method is also

not available to countries without independent monetary authorities such as Eurozone

countries.

Hence, borrowing is usually the most favourable method, but internal

borrowing pushes interest rate up against the expansionary monetary policy and

external borrowing is not always available. External borrowings, even if available,

come at high borrowing costs, which are resources that can otherwise be used for their

own economic growth. Due to this, borrowing gives temptation for those countries to

withdraw stimulus package early. Reflecting on the U.S. experience in 1936,

premature withdrawal of lifeline will put the economy to double-dip recession. This

risk will be further elaborated in the later part of this paper.

Anti-recession policies are expensive but the effect is global, hence different

countries need to work closer together to help one another in recovering from the

global crisis.

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3.3 Global Cooperation in International Trade and Exchange Rate policies

During the Great Depression in the 1930s, one of the mistakes done by many

governments was that they engaged in trade protectionism policies. At that time, the

American wanted to protect their domestic economy by imposing restrictions on

goods coming from the British Empire. As a result, the British Empire responded with

retaliation, export sectors were greatly affected and the economy spiraled down

further.

In today’s economic landscape, trade has become major features in the global

economies and many economies in the world depend on exporting industries as their

main driving engine. China, South Korea, and Singapore are examples of countries

that depended much on the conduct of world trade. Where many countries are the

exporters, America is the main primary market for those exported goods. For many

years, America experiences tremendous trade deficits to almost all of its trading

partners (Figure 9). As the result, U.S. accuse China of engaging in currency

manipulation, causing high consumption of imported Chinese goods in the States.

They blamed China for affecting the performance of American domestic industry and

hindering U.S. from tackling their high unemployment rate. Hence, pressurizing

China to revalue its currency, even with threat of imposing tariff to Chinese goods.

However, despite those threats, learning from the past mistakes of imposing

trade protectionism, the world is able to agree to restrain from taking protectionist

measure for global recession 2008/09. Many countries have decided to commit to free

and fair trade in APEC meeting 2008 and 2009. Right from the first G20 summit in

Washington until the most recent G20 summit in Seoul, the participating countries

have also pledge to not engage in trade protectionist measures.

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 Other than trade protectionism, the world has also realized that they need to

refrain from currency wars. It is understood that competitive devaluation only brings

harm to international trade of all countries. In the joint statement from G20 London

Summit in 2009, G20 leaders have also agreed to refrain from competitive

devaluation of their currencies as to promote stable international monetary regime.

This agreement has also been restated in subsequent G20 summits. It is understood

that depreciation of one currency leads to appreciation of other currencies against it.

Stronger currencies have similar effect of tightening monetary effect, and that could

jeopardize the central banks easing efforts. This as a result contributes to the

prevention of degeneration of recession into global depression.

However, such commitment might be fragile as there are possibilities that

some countries might take steps towards competitive devaluation since it is an easier

way to relieve their economic situation as compared to other ways such as serious

economic restructuring. As mentioned previously, current U.S. dollars depreciating

trend is also increasing temptation for other countries to engage in competitive

devaluation. Export competitiveness of these countries are affected by the

depreciation of U.S. dollars and since many countries keep their reserves in U.S

dollars (Figure 10), their assets value is also reduced in value.

Fortunately, unlike the 1930s, today global connectivity of world economy

have force governments of different countries to think twice before they take drastic

actions that not only jeopardize others but also themselves.

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4. Risk of W-Shape Recovery

Global recession in 2008 had indeed been prevented from degenerating into

world depression as many affected countries have shown signs of recovery. OECD

has also projected GDP of its members to grow by 2.7% in 2010 and 2.8% in 2011

(Figure 11). Nonetheless, many economists are concerned about risks in this recovery

and the possibility of a double-dip recession.

4.1 Debt crisis (Case Study: Euro zone)

Many countries with poor accumulation of foreign reserves had been forced to

finance its anti-recession deficit by borrowing from abroad or internally. In the

Europe, borrowing is more severe because usage of Euro as common currency in

Euro zone countries has ripped off their ability to finance budget deficit through

fiduciary issue or print money. Sovereign debt markets have been particularly instable

in Portugal, Ireland, Spain, Italy and Greece. Recently, the debt problem worsens as

EU authorities revised Greece’s debt to 126.8% of GDP, overtaking Italy at 116%

(Petrakis, 2010).

Spiraling sovereign debt in Euro zone countries poses high risk of second-dip

global recession originating from Europe. Although debt crisis is currently centered in

Greece, other European countries are in equally worrying position. Ireland, for

example, is also struggling with its devastated banking sector. Sovereign debt default

from Euro zone countries, if any, will be detrimental as many banks in euro-countries

are highly exposed to sovereign debt of one another (Figure 12). Even countries that

do not have serious problem in financing its deficit such as France and Germany will

be terribly affected by their counterparts’ debts defaults, because these two countries

are holding significant share of risky sovereign debts (Figure 13-17). Fragility of

Europe’s interdependent banking system will cause any resulting crisis to be easily

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spread across Eurozone. Hence, this will spread significant decline in trade and

investment activities, and consequently declining income and GDP. Since many

countries have not fully recovered from the recession, and confidence level in the

economy has not rebounded completely, the contraction effect will be easily spread to

the overall economy and cause a second-dip that might be more severe than the first

recession.

However, the gravity of this debt crisis and its possible grave consequences

had been widely recognized and actions have been taken to help those countries in

debt crisis. Stronger Euro zone countries had recognized the interconnectivity nature

of their economy and bailed troubled countries out of the recession. On top of that,

Committee of European Banking Supervisors (CEBS) had carried out stress-test

exercises on European banks to better understand the interconnected debt problem.

European Union and International Monetary Fund had also inspected Greek finances

(Bloomberg, 2010) and recently announced the launch of an emergency support for

Ireland’s banking sector (The Straits Times, 2010).

4.2 Premature withdrawal of fiscal stimulus (Case Study: Euro zone, US)

Besides the risk of sovereign debts default, countries in Euro zone also pose a

more distressing risk with their strong tendency for early fiscal stimulus withdrawal.

Premature withdrawal of stimulus is also a worrying issue in the United States.

As previously mentioned, many countries are facing difficulties in financing

its budget deficit, which is supposed to be the remedy for recession. Euro zone

countries are particularly in difficult situation due to the enforcement of EU’s

Stability and Growth Pact in which euro members are to keep their budget deficit

below 3% and debt below 6% of GDP. According to Euro stat, Greece’s budget

shortfall for last year had just been revised to 15.4% of GDP (Petrakis, 2010), while

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Ireland budget deficit last year was also as high as 14.4% of GDP (Irish Times, 2010).

Inability to devalue their currency, difficulty in borrowing and pressure of declining

bond rating added to the pressure of the EU’s budget rule, causing troubled countries

to be forced to reduce budget deficit and cut public spending.

While in the United States, monetary policy is not constrained and there is no

external pressure to reduce budget deficit, but there is internal difficulty in delivering

huge fiscal stimulus. Although $787 billion American Recovery and Reinvestment

Act was passed on February 2009, fiscal stimulus had actually been bitterly resisted

by many in the House and there is currently growing difficulty for new stimulus

package to be approved by the Congress. Many conservatives in the States, from both

Blue dogs democrats and Tea Party Republicans, do not approve the administration to

run on an unaffordable debt. In December 2009, Senate Democrats had cut bill down

from $154billion to $15billion. After which, the next package of $200billion was

trimmed by conservative democrats into smaller bill that added only $34 billion to

U.S. deficit (The New York Times, 2010).

Small fiscal stimulus had been proven to be ineffective in the past, but more

importantly, premature withdrawal of fiscal policy had evidently resulted in double-

dip nature in the Great Depression (Figure 18). Withdrawal of stimulus now, both in

Europe and in the States, is too premature as private demand is not yet ready to run

the economy on its own. Unemployment rate is still high around 10% in U.S. and

Europe. Early withdrawal of lifeline will cause GDP to shrink and unemployment to

rise. Whether this problem originates from U.S. or Europe, given the pessimism that

still prevails after recent recession, consumption, investment and trade activities will

easily drop, leading to contraction in the economy. Due to the interconnectivity of

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world economy and major roles Europe and U.S. play, this could result in double-dip

recession.

However, many countries today have realized their own economic problems

and they put effort in resolving the issues. For the Euro zone case, interconnectivity

again draws other countries to extend their help to troubled countries. For instance,

EU and IMF had agreed to €110billion bailout package to Greek earlier this year

(BBC News, 2010). British Chancellor had also very recently pledge to support up to

£7billion for a EU bailout of Ireland and its banking sector (Waterfield, 2010). The

United States, on the other hand, is turning to stronger yet controversial monetary

policy, such as the Second Quantitative Easing (QE2), to tackle the problem. The

policy is difficult to deliver though, as it faces much criticism from all over the world.

Effectiveness of such policy also remains uncertain.

4.3 Risk of Liquidity Shift and Asset Bubbles (Case Study: Asia)

American plan for QE2 faces much resistance and one of the reasons is

because many realize that such huge cash surge will not only further dilute the value

of U.S. dollar, but also encourages liquidity shift to emerging markets in Latin

America, Africa and especially in Asia, such as China and India. Current U.S. Dollar

depreciation and low interest rates have cause excessive capital flows to other

markets. Even countries such as Hong Kong, Thailand and South Korea are

increasingly concerned that their economy could be destabilize and their currencies

could be unfairly pushed up. Increasing U.S. money supply by $600billion will add to

the flood of money that will most likely speculate for higher returns in Asia.

This massive capital inflow can overheat Asian markets and risk inflating the

asset bubbles, especially in the securities and properties markets. According to

Bloomberg, Hong Kong Hang Seng Index had been driven up by 57% this year while

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its residential property prices had increased by 28%. The MSCI Asia Pacific Index

had also been inflated by 66% since March. Danger of bubble development and burst

put financial stability of affected countries at risk. This risk is significant, as 1997

Asian Financial Crisis had shown that instability and crisis are highly infectious in the

Asian region. Due to the interlinked nature of financial markets and vulnerability of

post-recession world economy, instability in Asia might also spread to other countries

in the world and cause another round of global recession.

Fortunately, this risk had been identified and Asian leaders had learnt from the

1997 Asian Financial Crisis. In the communiqué from recent Seoul G20 Summit, the

leaders had agreed to allow certain countries whose exchange rates are getting pushed

up to impose formal capital control. This is an agreement that would never be

approved by G8 summit. The result of this summit has certainly shown that world

leaders now comprehend the interdependency nature of world economy and the need

to be flexible, hence their greater willingness to cooperate as compared to the past or

to G8. The G20 had risen as a stronger cooperation with different balance of power as

compared to G8. A more diverse power in G20 and past experiences in 1997 Asian

Financial Crisis will take eastward concerns more seriously. Hence, risk of another

recession dip originating from Asia should be able to be avoided.

As the result, South Korea lawmakers are currently discussing the plan of re-

imposing 14% withholding tax on interest income on bonds foreigners purchase, and

20% capital-gains tax. The Economic Times also reported that Finance Secretary of

India had also announced that steps will be taken to slow capital flow, most likely by

setting a limit on the amount of money local companies can borrow from abroad.

Thailand, Taiwan and China have strengthened their capital controls too.

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4.4 Threat of Protectionism and Competitive Devaluation

In 2010 IMF/World Bank Annual Meeting, IMF Chief had warned that the

global financial crisis is not over yet and the fact that countries start to search for

domestic solutions to a global problem is a threat to recovery.

Even though the world had cooperated really well at the climax of the

financial crisis, the willingness of the countries to work together is not as strong

today. With U.S. keeps depreciating its dollar and recently announcing a controversial

monetary policy of QE2, other countries are under greater pressure and temptation to

manipulate their currencies to gain their own advantage. Weakening cooperation and

devaluation of U.S. dollars invoke rising fear of currency wars and trade

protectionism, especially between the United States and China. As discussed in

previous parts of this paper, competitive devaluation and protectionism are destructive

tools that bring the world economy further down especially in times of recession.

5. Conclusion

Learning from the Great Depression experience, the world has been able to

avoid Global Recession 2008/09 from aggravating into another depression. Various

policies and their effective combinations have been implemented. More importantly,

the new era of global cooperation has managed to avoid different countries from

jeopardizing one another. The global economy today has not fully recovered from the

recession and there is certainly risk of a double-dip recession. Currently, different

countries and international organizations are trying to solve various economic

problems in different parts of the world to avoid the risk of double-dip and drive the

economy towards recovery. Although mistakes from policy-makers can easily bring

in another round of recession, we remain optimistic that global cooperation will

remain strong, and the world economy will recover well.

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6. Appendix

Figure 1 Increase in subprime lending and house ownership

Figure 2 Growing bubble in U.S. housing market

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Figure 3 Increased risk in U.S. Investment Banks

 
Figure 4 Nominal and Real Interest Rates of Selected Countries 2010

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Figure 5 Unemployment Rate in U.S.

Figure 6 Foreign Exchange Rates of Selected Countries

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Figure 7 Countries running on budget deficits

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Figure 8 Effect of Stimulus (Deviations from control in growth rates)

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Figure 9
Worsening US Bilateral Merchandise Trade Deficit, 1980-2009 (in billion US$)
 

 
 
Figure  10  Composition  of  official  Foreign  Exchange  Reserves,  2009  

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Figure 11 Summary of Real GDP growth and growth projections
Source: OECD Economic Outlook No.87 by Pier Carlo Padoan, Chief Economist and Deputy
Secretary General published on 26 May 2010

Figure 12
Exposure of banks around Europe to sovereign debt of selected countries
Source: Committee of European Banking Supervisors stress test results published on July 23
2010; FT Research

European banks’ exposure to debt of: (In billion)

Ireland €29

Portugal €43.4

Greece €107.1*

Spain €256.5

Italy €327.1

*EU authorities had scrutinized Greece debt, and recently revised Greece’s debt
position to be worse than that of Italy (Bloomberg Businessweek, November  
 

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Figure 13 Spread of European banks exposure to debt of Italy
Source: Committee of European Banking Supervisors stress test results published on July 23
2010; FT Research

Figure 14 Spread of European banks exposure to debt of Greece

Source: Committee of European Banking Supervisors stress test results published on July 23
2010; FT Research

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Figure 15 Spread of European banks exposure to debt of Spain
Source: Committee of European Banking Supervisors stress test results published on July 23
2010; FT Research

Figure 16 Spread of European banks exposure to debt of Portugal

Source: Committee of European Banking Supervisors stress test results published on July 23
2010; FT Research

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Figure 17 Spread of European banks exposure to debt of Ireland
Source: Committee of European Banking Supervisors stress test results published on July 23
2010; FT Research

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Figure 18 Double-dip of U.S. GDP during Great Depression
Source: U.S. Department of Commerce and MBG Information Services

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7. References

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Bloomberg, Nov 20, 2010.

BBC News, “Euro zone approves massive Greece bail-out”, May 2, 2010.

BBC News, “IMF chief’s warning of currency war ‘real threat’,” Oct 7, 2010.

Bernard, S., Mathurin, P., Murphy, M., Stabe, M. (2010), “European Banks’
Sovereign Debt Exposure,” Financial Times, Nov 15, 2010.

Bloomberg (2010), “EU, IMF in Athens to inspect Greek finances,” The Associated
Press Businessweek, Nov 15, 2010.

Channel News Asia (2010), “Financial crisis not over yet: IMF Chief,” Nov 18, 2010.

Flanders, S. (2010), “When the G20 Stopped feeling like the G8-plus,” BBC News,
Nov 14, 2010.

Freedman, Charles, IMF Staff position notes, the case of global financial stimulus,
March 6, 2009.

Howells, C. (2010), “Reading between the lines of the G20 communiqué,”

Channelnewsasia, Nov 15, 2010.

Irish Times (2010), “Ireland had highest deficit in EU,” Irish Times Reporters
Business news, October 22, 2010.

Kong, K., Frangos, A. (2010), “Korea Moves to Impose New Capital Controls,” The
Wall Street Journal, Nov 18, 2010.

Lim, C.Y, Sng, H.Y (2009), “Unpreparedness in the Great Recession,” Singapore
Economic Review Conference (SERC).

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Lim, C.Y, (2008), “The US Financial Crisis, the Moral Hazard Problem and the Two
US Administrations” Special Lecture presented at The Philip Kotler Center for
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Lynch, D.J., Dorning, M. (2010), “Fed may Hesitate on More Easing after Crtics
Question Employment Mandate,” Bloomberg, Nov 18, 2010.

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Nanto, D.K. (1998), “The 1997-98 Asian Financial Crisis,” Congressional Research
Service Report.

Padoan, P.C. (2010), “A Strengthening Recovery, but also New Risks,” OECD
Economic Outlook No.87, May 26, 2010.

Petrakis, M. (2010), “Greece’s Deficit Revised to Largest in EU as Debt Tops Italy,”

Bloomberg Business week, Nov 15, 2010.

Remarks by Governor Ben S. Bernanke. Paper presented at the H. Parker Willis

Lecture in Economic Policy, Washington and Lee University, Lexington, Virginia.
March 2004.

Romer D. (2009), “Lessons from the Great Depression for Economic Recovery in
2009,” Brookings Institution.

Romer, C.D. (2010), “Now Isn’t the Time to Cut the Deficit,” The New York Times,
Oct 23, 2010.

Saltmarsh, M. (2010), “O.E.C.D Sees Risks to Recovery From Europe and Asia,”
Global Business with Reuters, The New York Times, May 26, 2010.

The New York Times (2010), “Economic Stimulus (Jobs Bills),” Times Topic on
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The Straits Times (2010), “EU launches ‘urgent’ rescue, Ireland Banking Crisis,” Nov
17, 2010.

Wall Street Journal (2009), “Stimulus Package Unveiled,” Jan 16, 2009.

Waterfield, B. (2010), “Ireland resists humiliating bail-out as UK pledges £7bn,” The

Telegraph, Nov 17, 2010 C.

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