Central banks were forced to use extraordinary policy measures to combat the macroeconomic consequences of the 2008–09 financial crisis. The experience also raised fundamental questions about existing monetary policy frameworks, causing central banks to revisit issues that were long thought to be resolved. Some critical observers even suggested that inflation targeting and the pursuit of price ...

In the aftermath of the 2007-2008 financial crisis, there has been criticism of mathematics and the mathematical models used by the finance industry. We answer these criticisms through a discussion of some of the actuarial models used in the pricing of credit derivatives. As an example, we focus in particular on the Gaussian copula model and its drawbacks. To put this discussion into its proper...

This paper proposes a new test of financial contagion based on a nonparametric measure of the cross-market correlation. The test does not depend on the assumption that the data are drawn from a given probability distribution, therefore it allows for maximal flexibility in fitting into the data. Simulation studies show that our test has reasonable size and good power to detect financial contagio...

In the context of the current financial crisis, when more companies are facing bankruptcy or insolvency, the paper aims to find methods to identify distressed firms by using financial ratios. The study will focus on identifying a group of Romanian listed companies, for which financial data for the year 2008 were available. For each company a set of 14 financial indicators was calculated and the...

The Chinese stimulus package of 2008 was a response by the government to rebound the second largest economy from the effects of the Global Financial Crisis. The package was one of the largest, and arguably one of the most successful, in boosting demand and spurring growth through targeting infrastructure projects and consumer spending. This paper investigates whether the package had any spillov...

Reports of the effects of the global economic crisis continue to dominate the headlines. In the United States, large drops in the housing market and a glut of risky mortgages have led to a spate of foreclosures. Many households have seen their retirement savings depleted as stock values have plummeted. Rising unemployment threatens the economic security of a growing number of families. How are ...

This paper tests whether consumption pattern in Korea exhibits a time-inconsistent discounting behavior using a quasi-hyperbolic Euler equation estimated by the generalized method of moments (GMM). In particular, we examine whether consumers change their discounting behavior during financial crises in 1997 and 2008. The estimation results show that Korean consumers exhibit a time-inconsistent q...

In early May, widows of men who killed themselves began marching on tax offices in Bologna, Italy. Their protest? Austerity and tax collection put their husbands at risk. This is the first grassroots movement on mental health in Europe responding to what has been recently dubbed ‘suicide by economic crisis’. But not everyone agrees with these widows’ interpretation of events. Although articles ...

Prediction of economic variables is a basic component not only for economic models, but also for many business decisions. But it is difficult to produce accurate predictions in times of economic crises, which cause nonlinear effects in the data. Such evidence appeared in the German automobile industry as a consequence of the financial crisis in 2008/09, which influenced exchange rates and a...

The financial crisis of 2008 led to new international regulatory controls for the governance, risk and compliance of financial services firms. Information systems play a critical role here as political, functional and social pressures may lead to the deinstitutionalization of existing structures, processes and practices. This research examines how an investment management system is introduced b...