Final Crisis Essay Assignment | Online Assignment
Essay Prompt In this spring’s course we develop an understanding of the structure and role of the financial sector throughout the history of the US economy, exploring how the nature of money, financial regulation, and the role of the central bank and monetary policy has evolved throughout United States history. The concepts of asymmetric information were important and were critical for understanding bank runs and financial crises, informing our study of the Great Depression and the Financial Collapse of 2008. For the course’s extra credit, I ask you to apply what we have developed to analyze a financial crisis of your choosing that has occurred in the United States. The following list of financial crises to choose from is not exhaustive – if you find another crisis that you would like to explore then please propose that to me (The Great Depression and the 2008 financial collapse are off limits, as we have covered these in class). The requirement is that the crisis effects the United States economy: • The Panic of 1785 • The Panic of 1792 • The Panic of 1796-97 • The Panic of 1819 • The Panic of 1837 • The Panic of 1857 • The Panic of 1873 • The Panic of 1884 • The Panic of 1893 • The Panic of 1901 • The Knickerbocker Crisis of 1907 • Early 1980’s Recession in the US • Savings and Loans Crisis of 1980s • Junk Bond Crash of 1989 • Dotcom Bubble of 1999-2000 For full credit on this assignment, write an essay addressing each of the following: 1. How did the crisis unfold? Provide a timeline, some context, and a discussion of the major events of the crisis. Explain how, and why, the financial crisis happened. 2. What role, if any, did expectations, speculation, and risk taking play in the crisis? Explain what role these three may have played in setting the stage for the crisis. 3. What were the implications for the broader economy, and for the broader global economy? In other words, discuss how the crisis in the financial sector translated to crisis in other sectors. 4. What actions were taken to contain the crisis and/or support the financial sector? This includes government action, some resulting regulations of the financial sector, some action of the central bank, or the actions of powerful private parties (for example, large banks and wealthy investors have a history of trying to step in and restore confidence in the financial system to head off a crisis). While there is no formal length requirement, I expect that the final product should be anywhere between 3 and 6 pages. Grading will be based upon the accuracy and degree to which you address the criteria outlined above. Full credit requires a thoughtful and thorough discussion of each. Please use MLA style for your citations and please double-space your document.