October 30, 2013.
Lecture 8 – Global Finance
Global economic crisis of 2008
10s of millions of people losing jobs, homes, savings
Iceland: until recently had very low unemployment and national debt
o Excellent infrastructure; clean energy and air, good education, low crime rates,
quota system fisheries, etc.
o Three main banks of Iceland collapsed; were privatized, borrowed money three
times the size of Iceland’s economy, prices of houses doubled, etc.
o Government financial regulators
Lehman and AIG bankruptcy
o Resulted in huge financial crash, doubled US national debt
Rise of US financial sector resulted in various crises since the 80s, each