What Do We Learn About the Causes of Banking Crises

question 59

Essay

What do we learn about the causes of banking crises by comparing crises throughout the world to those that have occurred in the United States?

---

Definitions:

Rate of Unemployment

The segment of the labor force that is without a job and actively on the look out for employment opportunities.

Passive Approach

A strategy, particularly in investing or management, where minimal intervention or action is taken, often to maintain the current state or to avoid risk.

Recessionary Gap

The difference between the actual output of an economy and its potential output at full employment, indicating underutilization of resources.

Inflationary Expectations

The anticipation of future inflation rates, influencing economic decisions and behavior.