Authors of theses are nothing but greedy bankers, regulators sleep and irresponsible borrowers, whose individual decisions that brought together about the economic crisis.
Raghuram Rajan was one of the few economists who warned the world of global financial crisis before it met. In the book, Rajan warns the serious defects of the economy that must be fixed to prevent potentially devastating, with the crisis that awaits us. Rajan has two mainCauses that led to the initial failure was stagnant wages-and the other one was the growing inequality in the United States
All this to the reduced purchasing power of many middle-class families, the birth of an urgent demand for credit was made. The financial sector, which had already gained encouragement from the Government has responded back home equity loans, subprime loans and car loans. Most economists had not considered that the side effects of the credit growth without limitswould be more devastating.
Raghuram writings are always well founded and justified on the basis of facts. While the book is worth it, even to explain why we had a crisis and is also stimulating article in the wake of the financial crisis. The reader will notice that the book is full of great examples and cases, and certainly some question the long held prejudices about the current economic conditions in Western countries.
Raghuram, in his book alsodefines some common patterns of economic behavior in homes worldwide, markets and governments, and shows that when economic conditions are challenging the difference in behavior between developed and developing countries has become insignificant.
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