The Subprime Financial Crisis: A comparison with the financial crisis and 'lost decade' in Japan during the early 1990s (PDF)

Inhaltsangabe:Introduction:
It seems useful to me, due to the currentness of the situation and the potential similarities with other financial crises, especially the Japanese financial crisis during the early 1990s, to choose this topic for my Master Thesis in International Economics. Furthermore, the upcoming research concerning this topic also serves my personal interest.
In this paper different theoretic approaches, such as Boom and Bust cycles and the anatomy of bubbles will firstly be addressed. Afterwards, the financial crisis in Japan during the early 1990s will be analyzed and commented on; subsequently the Subprime Financial Crisis in the United States, which was initiated by the falling real estate prices since summer 2006 will be explained and examined. Afterwards an analysis will follow, if governments and central banks have - observed - and learned from other countries past mistakes and will be able to prevent a depression in their regions or countries similar to the lost decade in Japan, or eventually lack the instruments, the conviction, and willingness to do so. To substantiate different assertions, among others, a utilization of the suggestions of well-known economists will take place to narrow down the statements that have been made. Afterwards, a comparison of both financial crises will take place. Subsequently, an illustration of similarities and differences between the current Subprime Mortgage Crisis and the financial crisis in Japan during the early 1990s will be displayed; consequently conclusions and a possible outlook will follow. In order to provide an idea on what this paper will be about and how it should be understood, there will at first be an introduction of some basic thoughts and historical examples about speculations in the financial world over time, followed by theoretical explanations of useful economical framework in the given context. Inhaltsverzeichnis:Table of Contents:
Statutory Declaration2
1.Introduction4
2.Theory of Speculative Bubbles5
a.Basics5
c.Anatomy of Bubbles8
d.Central Banks9
i.Inflation10
ii.Natural Rate of Interest11
iii.NAIRU12
iv.Taylor Rule14
v.Inflation Targeting15
vi.Deflation16
vii.Stagflation18
3.Financial crisis in Japan in the early 1990s20
a.Background to the Forge of the Financial Bubble20
b.The Process of Deregulations21
c.Structural and Behavioral Difficulties22
d.Formation of the Japanese Bubble25
e.Provisions Post-Bursting of the Bubble27
f.Production […]