ERA

Download the full-sized PDF of Essays on the 2007-08 Financial Crisis and the Global Asset ShortageDownload the full-sized PDF

Analytics

Share

Permanent link (DOI): https://doi.org/10.7939/R3JM23P00

Download

Export to: EndNote  |  Zotero  |  Mendeley

Communities

This file is in the following communities:

Graduate Studies and Research, Faculty of

Collections

This file is in the following collections:

Theses and Dissertations

Essays on the 2007-08 Financial Crisis and the Global Asset Shortage Open Access

Descriptions

Other title
Subject/Keyword
Speculation
Asset Shortage
Efficiency
Arbitrage
Financial Crisis
Type of item
Thesis
Degree grantor
University of Alberta
Author or creator
White, Robert McKay
Supervisor and department
Chakravorty, Ujjayant (Economics)
Examining committee member and department
Ryan, David (Economics)
Fossatti, Sebastian (Economics)
Fatum, Rasmus (Business)
Hryshko, Dyma (Economics)
West, Doug (Economics)
Department
Department of Economics
Specialization

Date accepted
2014-01-31T13:25:47Z
Graduation date
2014-06
Degree
Doctor of Philosophy
Degree level
Doctoral
Abstract
The twenty-year period from 1990 to 2010 exhibited significant and consequential international economic phenomena. Global imbalances, primarily the U.S. current account deficit, were very prominent, along with the development and bursting of a real estate bubble, low interest rates and saving rates, and a brief shock to the oil market in 2008. This thesis addresses these phenomena. The first paper addresses the question of whether speculative oil inventories were accumulated in response to conditions in asset markets, and whether such inventories were the cause of the oil price shock. Using cointegration techniques, it tests whether the arbitrage condition required for speculative inventories to be accumulated held at any period. It finds evidence that above-ground and below-ground speculative inventories were accumulated, but not at the time of the oil price shock. The second paper addresses the issue of how to test the dynamic efficiency of an economy. The real estate bubble in the early 2000s and the correspondingly low interest rate suggests the possibility of dynamic inefficiency in the U.S. economy. Previous methods used to test dynamic efficiency are shown to be inadequate for testing dynamic efficiency in this period. Cointegration analysis is introduced as an ideal testing methodology for determining the long-run equilibrium relationship between capital accumulation and profit and whether any bubbles mask that relationship. It finds the U.S. economy became dynamically inefficient in 2000. The third paper proposes a model to explain the U.S. current account deficit, low interest rate, low saving rate, and the real estate bubble. The model demonstrates how the behaviour of all four variables could have been caused by shocks to the U.S. terms of trade. These shocks initially increased domestic saving and foreign income, creating higher demand for financial assets. Greater demand for assets started the decline of the interest rate. The trade deficit created the current account deficit. The declining interest rate created dynamic inefficiency, causing the emergence of the real estate bubble. Low interest rates encouraged domestic borrowing to finance consumption. Domestic saving rates declined while foreign income continued to increase. The effect of the higher foreign supply of loanable funds was stronger than the increased domestic demand for loanable funds, resulting in a low equilibrium interest rate.
Language
English
DOI
doi:10.7939/R3JM23P00
Rights
Permission is hereby granted to the University of Alberta Libraries to reproduce single copies of this thesis and to lend or sell such copies for private, scholarly or scientific research purposes only. Where the thesis is converted to, or otherwise made available in digital form, the University of Alberta will advise potential users of the thesis of these terms. The author reserves all other publication and other rights in association with the copyright in the thesis and, except as herein before provided, neither the thesis nor any substantial portion thereof may be printed or otherwise reproduced in any material form whatsoever without the author's prior written permission.
Citation for previous publication

File Details

Date Uploaded
Date Modified
2014-06-15T07:02:50.445+00:00
Audit Status
Audits have not yet been run on this file.
Characterization
File format: pdf (Portable Document Format)
Mime type: application/pdf
File size: 16963966
Last modified: 2015:10:12 19:37:06-06:00
Filename: White_Robert_Winter 2014.pdf
Original checksum: 4ef35af97cfaab30ab88c80ca34d5898
Well formed: true
Valid: true
Status message: File header gives version as 1.4, but catalog dictionary gives version as 1.3
Status message: Too many fonts to report; some fonts omitted. Total fonts = 2662
File title: Microsoft Word - RMW Revised Thesis Dec 2013.docx
Page count: 100
Activity of users you follow
User Activity Date