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Use It or Lose It Understanding Financial Crises through an Evaluation of Creditor Behaviour

This presentation by Keith Rankin at Unitec New Zealand delves into financial crises through an analysis of creditor behavior. The discussion covers a balanced global system with two economic agents, the normal and stable states of the balance of payments, as well as definitions of Ponzi finance in balance of payments terms. Insights are provided on static and unstable systems, excess credit accumulation, and implications for households in different economic scenarios.

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Use It or Lose It Understanding Financial Crises through an Evaluation of Creditor Behaviour

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  1. Use It or Lose ItUnderstanding Financial Crises through an Evaluation of Creditor Behaviour Presentation for University of Auckland Public Policy Group by Keith Rankin Dept of Accounting and Finance Unitec New Zealand Thursday, 29 October 2009 http://pol-econ.com/GFC

  2. Balanced Global System with two economic agents

  3. Balance of Payments: Normal State of Global System

  4. Balance of Payments: Stable System - Static note

  5. Balance of Payments: Stable System – Alternates with Fig 1

  6. Balance of Payments: Unstable System – Excess Credit Accumulation

  7. Balance of Payments Definitions

  8. Ponzi Finance defined in Balance of Payments terms

  9. Balance of Payments: Stable System - Static note:D's household is fully employed;C's household members should be enjoying more leisure than D's. ButC may reward his household members in proportion to what they produce!

  10. Balance of Payments: Unstable System – Excess Credit Accumulation note:simple Ponzi system: t=0; i>0; i+f=0otherwise: t>0; i>0; i+f<0

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