Explore the complex factors that led to the Great Recession in this 32-minute video lecture from the series "International Economic Institutions: Globalism vs. Nationalism." Delve into the misuse of financial tools, flawed risk models, interest rate mistakes, and problematic government credit policies that contributed to the economic crisis. Examine the debate surrounding risk management, focusing on the tools versus their users. Learn about Value at Risk, its measurement, and how it's revised based on Black Swan events. Investigate the role of mortgage pools, subprime delinquencies, and the impact of transparency in mortgage markets. Discover how Collateralized Mortgage Obligations innovated the financial landscape. Analyze the Federal Reserve's misapplication of the Taylor Rule post-2001 and the Boston Fed's misuse of risk mitigation factors. Finally, consider how politicians' actions in bailing out banks may have inadvertently encouraged defaults.
The Great Recession - International Economic Institutions
Overview
Syllabus
Economists Disagree on the Great Recession of 2008
Quants Blame Tools Rather than the Misuse of Tools
What is Value at Risk?
Measuring Value at Risk
Revising Measurement Based on Black Swan Events
Mortgage Pools Are the Wrong Tool
Money Managers Ignore Rising Subprime Delinquencies
Transparency in Mortgage Markets Raise Asset Prices
Collateralized Mortgage Obligations Innovate
The Fed Misuses the Taylor Rule After 2001
Boston Fed Misuses Every Risk Mitigation Factor
Politicians Encourage Defaults by Bailing Out Banks
Taught by
Wondrium
