Article Abstract:
The financial deregulation of the 1980s had the consequence of creating a large debt overhang in the US. Borrowing in the US after deregulation amounted to 2.5 trillion dollars, representing 50% of total output. Borrowing in the US was predicated upon obtaining an adequate source of income from investments from which to cover debt repayments, and when those income streams proved inadequate for many borrowers, much of the debt could not be serviced. The current US recession was triggered by the oil price, and the massive debt overhang will affect its duration and depth. The UK will be hard hit by the economic effects of the US recession and debt overhang, which has resulted in an undervalued dollar. The US will decrease its imports and US exporters will become more competitive for international market share, which will have adverse effects on the UK economy.
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Article Abstract:
Japan is experiencing a severe growth recession as a result of the Bank of Japan's adoption of a stringent monetary policy at the beginning of 1990. Designed to reform the Japanese economy, and to curb inflation in the prices of assets, goods and services, the tight monetary policy has led to reductions in investment goods, real GNP, real domestic demand, industrial production, retail sales and money supply growth rates. Also expected to fall further are corporate demand for funds and bank lending growth rates. The current state of the Japanese economy is analyzed as the combination of the down-side Keynisian multiplier and the supply-side credit multiplier which results in spiraling debility. To stop the deceleration of the economy, the Bank of Japan has decided to ease the monetary policy. The government is also pursuing a new public works program.
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Article Abstract:
The so-called 'tequilla crisis' in Mexico in 1995 is considered in terms of recovery in Latin American during 1996.
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