Crises and the Great Recession

The U.S. economy suffered in 2007–10 from crises in mortgage foreclosures and in financial markets, as well as a long recession that some have referred to as the Great Recession. The links between these events, or more broadly their causes, extent, and effects are sources of continuing controversy and uncertainty. This paper attempts to disentangle the links between the mortgage foreclosure crisis, the financial crisis, a possible banking crisis, and the Great Recession, at least in terms of timing, and also to provide an alternative view to the conventional wisdom, especially for the links of the crises to the recession and to each other.     

Wealth Inequality and the Great Recession

The study of wealth and wealth inequality has received far less attention than income, but the increasing importance of wealth, debt and wealth inequality means closer attention must be paid to their concomitant dynamics. Policy interventions to reduce economic inequality continue to target income more than wealth, but targeting the latter – especially through taxes on financial assets – is arguably more effective.     

The Great Recession and the Rise of Populism

Intereconomics - The success of populist rhetoric in Europe is worrisome as it presents a threat to national and European institutions, the rule of law, and other fundamental free-market democratic...     

The Labor Market in the Aftermath of the Great Recession

The Great Recession took a large toll on the U.S. labor market, reducing jobs and raising unemployment across most sectors and among workers of all skill levels. Although conditions have improved over the last five years, by most metrics the labor market recovery remains incomplete. The slow progress of recovery has raised concerns that some of the damage done by the recession will be permanent, and that a return to prerecession conditions is unlikely. This paper argues that although the recession coincided with, and even accelerated ongoing structural changes in the economy, most of the disruptions were cyclical and will likely be repaired over time. Should things evolve otherwise, the impact on the potential output and future growth of the economy could be profound.     

Interpreting the Performance of Business Economists During the Great Recession

It is generally believed that the recession of 2007–09 was not foreseen by business economists. Is this perceived view accurate? We explore this issue by examining business economists’ published statements about economic conditions. We compare these qualitative forecasts with the Beige Book. We conclude that both sets of data are similar and that business economists are responsive to information about the economy and adjust their predictions quickly.     

Cognitive Ability and the Stock Reallocations of Retirees during the Great Recession

Retirees are increasingly responsible for managing their retirement savings. The ability to manage these assets efficiently can have an important impact on retirement well‐being. Lower levels of cognitive ability in old age can reduce an investor's ability to control emotional responses to a loss. Greater sensitivity to loss may increase preferences for safety following a market decline, resulting in allocations away from stocks that are associated with long‐term underperformance. We investigate whether cognitive ability is related to stock reallocations among retirees during the Great Recession. Using the Health and Retirement Study, we find that cognitive ability is negatively related to allocations away from stock. Compared to those with the lowest levels of cognitive ability, respondents with higher cognitive ability are 40% less likely to reduce their stock allocation by 50% or more. These results suggest that the quality of investment decisions in old age may be compromised by cognitive decline.     

The Impact of the Great Recession on Financial Services Advertising: An Exploratory Study

We explore how advertising managers of financial services organizations have responded to the repercussions of the Great Recession in their advertising strategies. To this end, we compare print ads for financial services that appeared in six magazines at two periods in time: 2005, prior to the Great Recession and 2010, after the end of the Great Recession. We content analyzed 755 prints ads and found major differences in the advertising strategies from prerecession to postrecession, particularly in the type of appeals. We further examined these strategic shifts by audience focus (business-to-business and business-to-consumer) and gender focus (male, female, or both).     

Forecasting Recession and Slow-Down Probabilities with Markov Switching Probabilities as Right-Hand-Side Variables

Forecasting the likelihood of recessions and slow-downs is an important issue for many who use economics in business. While there has been a large and growing body of literature on the likelihood or recessions, there has been little on slow-downs.. This paper presents a new method that uses Markov switching probabilities as right-hand-side variables. The advantages of doing so are described, as are the results of empirical work. These results suggest that the approach presented here is worth adding to economists’ tool kits.     

The Great Recession of 2008: Impact on the Bangladeshi economy and international business implications

This article examines the current global financial crisis (GFC) and its impact on Bangladesh's economy and discusses international business implications for the country within an institution‐based analytical framework. The article finds that the macroeconomy of Bangladesh has shown remarkable resilience in the face of this massive global crisis, and the impact has been minimal and limited to a moderate slowdown of the economy The country thus could be poised for taking advantage of international business opportunities as the global economy begins to recover. Further, JPMorgan's Frontier Five and Goldman Sachs's Next Eleven classification of Bangladesh indicates enormous potential for growth and development. The article suggests that the Bangladeshi diaspora could serve as a connecting hub so that “brain gain” could be achieved through labor migration and remittances. Strategic alliances among home and foreign firms are also important to the future capacity building of the country. However, strategic management in the form of further institutional, structural, and policy reforms are critical in enabling the country to develop an international‐business‐friendly environment conducive to taking advantage of evolving global opportunities and realizing its full potential. © 2011 Wiley Periodicals, Inc.     

经济低迷期的“舍”与“得”

遭遇经济低迷,企业会尽可能地开源节流、削减成本,将现有资源价值最大化,以求顺利地度过低迷,走向复苏。这样顺势而为自然无可厚非,但问题往往是,大多数企业在危机中会更热衷一些表面上能产生速效的药方,不顾其副作用,这反而伤害了企业的长期竞争力。     

Fiscal Policies Amid the Global Downturn

In the time when the role of the market is strongly emphasized, most people trust the capability of market mechanisms to allocate resources. Today,market liberalization has become the mainstream of trend and a lot of people seem to oppose the excessive government intervention. Many States are benefiting from the economic globalization, and this makes some people feel that the government and its related agencies are losing their force and influence.     

Geo-politics and the impact of China's outward investment on developing countries: evidence from the Great Recession

Using a novel dataset on Chinese large-scale overseas investment and project contracts by sector and mode of entry, we analyze whether Chinese outward activity (COA) before the Great Recession worsened or alleviated the contractionary phases in developing countries. We find that, on average, COA did not increase recessionary vulnerability. Both sectoral targeting and the size of pre-crisis engagement matter. While COA in financial market sectors implies an aggravation, substantial pre-crisis investment in energy, metals and transportation industries tends to attenuate the slump. Additionally, the mode of entry, i.e. through either greenfield investment or mergers and acquisitions, also matters.     

低迷时期的战略反思

在低迷时期,企业更要具有长远的战略眼光来看待当下的危机,因为危机不但是挑战,更可能是一个绝佳的机会,而唯有那些想到为经济复苏早做准备的CEO才能把握住真正的机会,经受得住“潮水退后”的检验,在经济复苏时最早地迎来春天。     

Dancing as fast as they can: Israeli high‐tech firms and the Great Recession of 2008

This article shows that the Israeli economy weathered the Great Recession of 2008 rather well. Macroeconomic data show that Israel, with international trade that is highly dependent upon small, high‐tech multinationals, increased its outgoing foreign direct investment (FDI), outgoing greenfield investments, and exports during 2008 and attained good results compared to the European Union and the United States. The explanation offered is based on the predominance of high‐tech, born global companies and small high‐tech multinationals in Israel. Business strategies based on (1) size and flexibility, (2) focusing and tailoring, and (3) innovativeness and globalization allowed many of Israel's small, high‐tech multinationals to continue growing and attain their goals despite the Great Recession of 2008. Five case studies are presented to exemplify this argument. The continuing success of the high‐tech sector and its contribution to Israel's economy explains, among other things, why Israel was relatively unaffected by the crisis. © 2011 Wiley Periodicals, Inc.     

The Downturn:China‘s hoteliers look domestic

As the world turns to China for a way out of the economic downturn,hoteliers in China also are looking at,well...China. China's hoteliers see the domestic market as its best opportunity to help boost occupancy in tough times. Results from the recently conducted China Hotel Market Sentiment Survey,part of a     

止不住的生产率衰退

惠普,这家硅谷最古老的科技企业,包括乔布斯等一大半业界翘楚曾出自其门下的企业,或许对电脑业的微薄利润失望至极,决定抛弃PC业务。当全球经济再度低迷,二次探底之声不绝的时候,回顾IT业对经济增长的影响,或可解读出当前发达国家的尴尬处境。     

Retailing and the period leading up to the Great Recession: a model and a 25-year financial ratio analysis of US retailing

Today, more than ever, retailers need to analyze the key solvency (liquidity) and efficiency financial ratio measures that affect how well their firms perform and to engage in long-term activities that will lead to improved results. Clearly, the recent ‘Great Recession’ has had a significant negative impact on retailers worldwide. Yet, an important question remains largely answered: Was the retail industry a major contributor to the events leading up to the economic crisis or was it an affected bystander shaken by the recession? This paper addresses the question for US retailing, the largest retail economy in the world. Although there has been considerable research on some aspects of the performance of the industry and individual firms, no prior studies exist that comprehensively examine the financial ratio performance of the totality of US retailing over time. Here, the financial performance of US retailers in 54 different sectors is analyzed for the 1982–2007 period using a model and data derived from Dun & Bradstreet's annual Industry Norms & Key Business Ratios. Results show that for many financial measures – such as the current ratio, liabilities to net worth, return on sales (profit margin), return on assets, financial leverage, and return on net worth – US retailing's financial performance has been in a steady decline for decades. The model introduced here is largely validated.     

Corporate Restructuring in the UK during the Recession

This paper reports the results of a large scale survey of how UK firms are coping with the recession. Only a relatively small number of firms report being "extremely severely" affected by the recession, and these were firms with highly dispersed ownership structures, firms that grew unusually fast in the mid to late 1980s and holding companies. Among the responses to the recession identified by the survey was a substantial degree of organizational choice, effected mainly by closing plants. The most stable organizational form seemed to be the functional organization, while holding companies were the least.