Bachelor 2023/2024

Tail Risks and Global Economic Policy

Type: Elective course (Economics)

Area of studies: Economics

Delivered by: Department of Theoretical Economics

Where: Faculty of Economic Sciences

When: 4 year, 3 module

Mode of studies: offline

Open to: students of all HSE University campuses

Instructors: Martin G. Gilman

Language: English

ECTS credits: 3

Contact hours: 14

Course Syllabus

Abstract

There is a significant probability that many OECD countries are stumbling into a period of financial dislocation. Numerous indicators show that macro imbalances are at a tipping point, such as the public debt in the US going parabolic at now over 120% of GDP, with interest costs higher than defense spending. The unwillingness and/or inability of the major economic powers to confront the imbalances that led to the financial crisis of 2007-8 have laid the basis for an even worse repetition. The danger is that the confluence of slow real growth, low productivity increases, inflated asset prices, and especially much higher public debt in many of the major G20 economies cannot be sustained any longer. Ironically, Russia is one of the few exceptions. The Bank for International Settlements, among others, has been expressing its concerns that collectively we have been unable to constrain the build-up of financial imbalances, leading to a progressive narrowing of policy options. In this mini-course we will try to analyze why the financial bubble is starting to burst more than 15 years after the end of the last crisis, and why now? How was it possible to delay this outcome for so long? What policy tools were used? Why are they no longer working? What are the remaining policy options now? It may come as some relief to know that nobody in the profession seems to know the answer to these questions.