A scenario‐based 2 (communication timing: stealing thunder vs. thunder) × 2 (pre‐crisis reputation valence: positive vs. negative) × 2 (crisis type: product‐harm vs. moral‐harm) between‐subjects ...experiment was implemented with 273 Dutch participants to address the question of whether or not the positive effects of stealing thunder depend on pre‐crisis reputation valence and crisis type. Statistical analyses reveal that stealing thunder by an organization with a positive pre‐crisis reputation results in higher post‐crisis trust and purchase intention levels than stealing thunder by an organization with a negative pre‐crisis reputation. Moreover, crisis type interacts with crisis communication timing in influencing post‐crisis trust and purchase intention, as stealing thunder works better than thunder during a product‐harm crisis.
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The global financial and economic downturn that affected tourism from 2007 through to 2010 and beyond has cast substantial attention on the role that crisis events play in tourism. These concerns ...have only been exacerbated by natural disasters, such as the 2010 Icelandic volcanic plume, pandemics, and the potential of future global change. The potential effects of crisis events on international tourism are likely to increase in both size and frequency as tourism becomes increasingly hypermobile and the global economy even more interconnected. A review of the literature on tourism and crisis suggests that economic and financial crises receive the most research attention, with these crises events often being linked to other events such as terrorism and increased energy costs. This article concludes that the discourse on crisis in tourism raises fundamental concerns about the way that the notion of crisis is conceptualised and what constitutes normality.
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We use data on the 48 largest multinational banking groups to compare the lending of their 199 foreign subsidiaries during the Great Recession with lending by a benchmark of 202 domestic banks. ...Contrary to earlier and more contained crises, parent banks were not a significant source of strength to their subsidiaries during 2008-09. When controlling for other bank characteristics, multinational bank subsidiaries had to slow down credit growth almost three times as fast as domestic banks. This was in particular the case for subsidiaries of banking groups that relied more on wholesale funding.
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In 2012, Ben Bernanke, chairman of the U.S. Federal Reserve, gave a series of lectures about the Federal Reserve and the 2008 financial crisis, as part of a course at George Washington University on ...the role of the Federal Reserve in the economy. In this unusual event, Bernanke revealed important background and insights into the central bank's crucial actions during the worst financial crisis since the Great Depression. Taken directly from these historic talks,The Federal Reserve and the Financial Crisisoffers insight into the guiding principles behind the Fed's activities and the lessons to be learned from its handling of recent economic challenges.
Bernanke traces the origins of the Federal Reserve, from its inception in 1914 through the Second World War, and he looks at the Fed post-1945, when it began operating independently from other governmental departments such as the Treasury. During this time the Fed grappled with episodes of high inflation, finally tamed by then-chairman Paul Volcker. Bernanke also explores the period under his predecessor, Alan Greenspan, known as the Great Moderation. Bernanke then delves into the Fed's reaction to the recent financial crisis, focusing on the central bank's role as the lender of last resort and discussing efforts that injected liquidity into the banking system. Bernanke points out that monetary policies alone cannot revive the economy, and he describes ongoing structural and regulatory problems that need to be addressed.
Providing first-hand knowledge of how problems in the financial system were handled,The Federal Reserve and the Financial Crisiswill long be studied by those interested in this critical moment in history.
This paper takes stock of what we have learned from the "Renaissance" in fiscal research in the ten years since the financial crisis. I first discuss the new innovations in methodology and various ...strengths and weaknesses of the main approaches to estimating fiscal multipliers. Reviewing the estimates, I come to the surprising conclusion that the bulk of the estimates for average spending and tax change multipliers lie in a fairly narrow range, 0.6 to 1 for spending multipliers and -2 to -3 for tax change multipliers. However, I identify economic circumstances in which multipliers lie outside those ranges. Finally, I review the debate on whether multipliers were higher for the 2009 Obama stimulus spending in the United States or for fiscal consolidations in Europe.
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The financial crisis of 2007 to 2009 can be divided into two distinct phases. The first and more limited phase from August 2007 to August 2008 stemmed from losses in one relatively small segment of ...the U.S. financial system—namely, subprime residential mortgages. Despite this disruption to financial markets, real GDP in the United States continued to rise into the second quarter of 2008, and forecasters were predicting only a mild recession. In mid-September 2008, however, the financial crisis entered a far more virulent phase. In rapid succession, the investment bank Lehman Brothers entered bankruptcy on September 15, 2008; the insurance firm AIG collapsed on September 16, 2008; there was a run on the Reserve Primary Fund money market fund on the same day; and the highly publicized struggle to pass the Troubled Asset Relief Program (TARP) began. How did something that appeared in mid-2008 to be a significant but fairly mild financial disruption transform into a full-fledged global financial crisis? What caused this transformation? Did the government responses to the global financial crisis help avoid a worldwide depression? What challenges do these government interventions raise for the world financial system and the economy going forward?
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The ongoing COVID-19 pandemic has inspired an examination of the oil–gold prices nexus during four recent crises: the COVID-19 pandemic, the gold market crash, the European sovereign debt crisis, and ...the global financial crisis. Using daily data from May 2007–August 2021, we employ the nonlinear autoregressive distributed lag method to reveal five novel findings. First, this study contrasts with much of the literature, which infers that the relationship between oil and gold prices is strongly positive. Second, we find no oil and gold price relationship in the long term during all the crisis periods. Third, oil prices have substantially lost their power to predict gold prices in recent times and the oil–gold price linkage is not functional across all crisis periods. Fourth, in the short term, only negative Brent and negative West Texas Intermediate price changes cause positive gold price changes during the pandemic and gold market crash, respectively. Fifth, Brent prices have shown no link to gold prices before COVID-19. We argue that gold prices are less sensitive to oil prices than ever, and the uncertainty resulting from the COVID-19 crisis has attracted investors to gold. Our main findings hold under robustness analyses using fractional cointegration/integration models, lag length, and heteroskedasticity-consistent standard errors.
•Oil prices elevate gold prices during COVID-19, GMC, ESDC, and GFC.•Predictive power of oil prices on gold prices has abated substantially over time.•Only during ongoing COVID-19, negative Brent oil prices increased gold prices.•Changes in WTI and Dubai oil prices positively drove gold prices during the GFC.•Brent oil prices have shown no link to gold prices before COVID-19.
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This volume presents the first thorough sociologically-informed legal analysis of the financial crisis which unfolded in 2008. It combines a multitude of theoretically informed analyses of the ...causes, dynamics and reactions to the crisis and contextualises these within the general structural transformations characterising contemporary society. It furthermore explores the constitutional implications of the crisis and suggests concrete changes to the constitutional set-up of contemporary society. Although the question of individual responsibility is of crucial importance, the central idea animating the volume is that the crisis cannot be reduced to a mere failure of risk perception and management for which individual and collective actors within and outside of financial organisations are responsible. The 2008 crisis should rather be understood as a symptom of far deeper structural transformations. For example contemporary society is characterised by massive accelerations in the speed with which societal processes are reproduced as well as radical expansions in the level of globalisation. These transformations have, however, been asymmetrical in nature insofar as the economic system has outpaced its legal and political counterparts. The future capability of legal and political systems to influence economic reproduction processes is therefore conditioned by equally radical transformations of their respective operational forms and self-understanding. Potentially the 2008 crisis, therefore, has far-reaching constitutional implications.
Are some banks prone to perform poorly during crises? If yes, why? In this paper, we show that a bank's stock return performance during the 1998 crisis predicts its stock return performance and ...probability of failure during the recent financial crisis. This effect is economically large. Our findings are consistent with persistence in a bank's risk culture and/or aspects of its business model that make its performance sensitive to crises. Banks that relied more on short-term funding, had more leverage, and grew more are more likely to be banks that performed poorly in both crises.
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Despite significant research on the efficacy and inadvertent humanitarian and political effects of economic sanctions, surprisingly little is known about the possible economic and financial ...consequences of sanctions for target economies. Synthesizing insights from the currency crisis literature with sanctions scholarship, we argue that economic sanctions are likely to trigger currency collapses, a major form of financial crisis that impedes economic growth and prosperity. We assert that economic coercion instigates currency crises by weakening the economy and creating political risks conducive to speculative attacks by currency traders. To substantiate the theoretical claims, we use time-series cross-national data for the 1970–2005 period. The results from the data analysis lend support for the hypothesis that sanctions undermine the financial stability of target countries. The findings also indicate that the adverse effect of economic coercion on the financial stability of target economies is likely to be conditioned by the severity of the coercion and the type of actors involved in the implementation of sanctions. The findings of this article add to the sanctions literature demonstrating how economic coercion could be detrimental to the target economy beyond the immediate effect on trade and investment. It also complements and adds to the literature on political economy of currency crises that has so far overlooked the significant role that economic coercion plays in financial crises.
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