Citation

Discussion Paper Details

Please find the details for DP8688 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Apocalypse Then: The Evolution of the North Atlantic Economy and the Global Crisis

Author(s): Tamim Bayoumi and Trung Bui

Publication Date: December 2011

Keyword(s): economic crisis, financial deregulation, financial integration and North Atlantic economy

Programme Area(s): International Macroeconomics

Abstract: The financial crisis that struck the global economy in late 2008 had its origins in excesses in the US housing market. Its reverberations, however, were felt around the world and nowhere more keenly than in Western Europe. While North Atlantic trade links were in relative stasis, the North Atlantic furnished a uniquely close relationship across financial institutions, as a combination of dominant US financial markets, European competition policy, and differences in financial regulation made the European banking system heavily dependent on dollar wholesale funding. Empirical estimates and macroeconomic model simulations indicate that growth spillovers predominantly flow westwards across the North Atlantic. The bellwether nature of US financial markets creates uniquely large spillovers to the rest of the world even in normal times, and these spillovers are only enhanced if disruptions to bank wholesale funding markets are added -- as occurred during the recent global crisis.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8688

Bibliographic Reference

Bayoumi, T and Bui, T. 2011. 'Apocalypse Then: The Evolution of the North Atlantic Economy and the Global Crisis'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8688