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This book is useful for those seeking to learn about the history of market crises and individuals who want to learn about protection against downside risks for an investment portfolio. The purpose of this book is not to convince the reader to attempt to anticipate the timing of the next market crash, but rather for the reader to be able to draw parallels (and some contrasts) between the different crises in history. The book reviews case studies related to specific macroeconomic event triggers ranging from COVID-19 to hyperinflation.

Financial crises. --- Monetary policy. --- International finance. --- Financial institutions, International. --- Financial crisis. --- Government debt. --- Fractional-reserve banking. --- Gold standard. --- Currency. --- Money supply. --- Inflation. --- Economy. --- Interest rates. --- Crash.

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In a world dominated by uncertainty, modeling and understanding the optimal behavior of agents is of the utmost importance. Many problems in economics, finance, and actuarial science naturally require decision makers to undertake choices in stochastic environments. Examples include optimal individual consumption and retirement choices, optimal management of portfolios and risk, hedging, optimal timing issues in pricing American options, and investment decisions. Stochastic control theory provides the methods and results to tackle all such problems. This book is a collection of the papers published in the Special Issue “Applications of Stochastic Optimal Control to Economics and Finance”, which appeared in the open access journal Risks in 2019. It contains seven peer-reviewed papers dealing with stochastic control models motivated by important questions in economics and finance. Each model is rigorously mathematically funded and treated, and the numerical methods are employed to derive the optimal solution. The topics of the book’s chapters range from optimal public debt management to optimal reinsurance, real options in energy markets, and optimal portfolio choice in partial and complete information settings. From a mathematical point of view, techniques and arguments of dynamic programming theory, filtering theory, optimal stopping, one-dimensional diffusions and multi-dimensional jump processes are used.

Economics, finance, business & management --- debt crisis --- government debt management --- optimal government debt ceiling --- government debt ratio --- stochastic control --- decision analysis --- risk management --- Bayesian learning --- Markowitz problem --- optimal portfolio --- portfolio selection --- Markov additive processes --- Markov regime switching market --- Markovian jump securities --- asymptotic arbitrage --- complete market --- multiple optimal stopping --- general diffusion --- real option analysis --- energy imbalance market --- optimal reinsurance --- excess-of-loss reinsurance --- Hamilton-Jacobi-Bellman equation --- stochastic factor model --- American options --- least square method --- derivatives pricing --- binomial tree --- stochastic interest rates --- quadrinomial tree --- insurance --- unemployment --- optimal stopping --- geometric Brownian motion --- martingale --- free boundary problem --- American call option --- utility

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In a world dominated by uncertainty, modeling and understanding the optimal behavior of agents is of the utmost importance. Many problems in economics, finance, and actuarial science naturally require decision makers to undertake choices in stochastic environments. Examples include optimal individual consumption and retirement choices, optimal management of portfolios and risk, hedging, optimal timing issues in pricing American options, and investment decisions. Stochastic control theory provides the methods and results to tackle all such problems. This book is a collection of the papers published in the Special Issue “Applications of Stochastic Optimal Control to Economics and Finance”, which appeared in the open access journal Risks in 2019. It contains seven peer-reviewed papers dealing with stochastic control models motivated by important questions in economics and finance. Each model is rigorously mathematically funded and treated, and the numerical methods are employed to derive the optimal solution. The topics of the book’s chapters range from optimal public debt management to optimal reinsurance, real options in energy markets, and optimal portfolio choice in partial and complete information settings. From a mathematical point of view, techniques and arguments of dynamic programming theory, filtering theory, optimal stopping, one-dimensional diffusions and multi-dimensional jump processes are used.

Economics, finance, business & management --- debt crisis --- government debt management --- optimal government debt ceiling --- government debt ratio --- stochastic control --- decision analysis --- risk management --- Bayesian learning --- Markowitz problem --- optimal portfolio --- portfolio selection --- Markov additive processes --- Markov regime switching market --- Markovian jump securities --- asymptotic arbitrage --- complete market --- multiple optimal stopping --- general diffusion --- real option analysis --- energy imbalance market --- optimal reinsurance --- excess-of-loss reinsurance --- Hamilton-Jacobi-Bellman equation --- stochastic factor model --- American options --- least square method --- derivatives pricing --- binomial tree --- stochastic interest rates --- quadrinomial tree --- insurance --- unemployment --- optimal stopping --- geometric Brownian motion --- martingale --- free boundary problem --- American call option --- utility

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Persistently high inflation rates have led many to believe that inflation in Turkey has become "inertial," posing an obstacle to disinflation. We assess the empirical validity of this argument. We find that the current degree of inflation persistence in Turkey is lower than in Brazil and Uruguay prior to their successful stabilization programs. More significantly, expectations of future inflation are more important than past inflation in shaping the inflation process, providing little evidence of "backward-looking" behavior. Using survey data, we find that inflation expectations, in turn, depend largely on the evolution of fiscal variables.

Inflation --- Macroeconomics --- Public Finance --- Price Level --- Deflation --- Monetary Policy --- Debt --- Debt Management --- Sovereign Debt --- Fiscal Policy --- Public finance & taxation --- Inflation persistence --- Disinflation --- Government debt management --- Fiscal stance --- Prices --- Public financial management (PFM) --- Fiscal policy --- Debts, Public --- Turkey

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This paper provides the first systematic empirical assessment of the pace at which housing investment has responded to rising demand from urbanization. The assessment used National Accounts Statistics to build a data set of residential housing investment for more than 90 countries. The data set explicitly accounts for investment by households, the government, and the private sector. The analysis finds that housing investment follows an S-shaped trajectory taking off around per capita GDP of about USD 3,000 (USD 2005) and tapering down at per capita GDP around USD 36,000 (USD 2005). The analysis also finds that between 2001 and 2011, housing investment in low-income economies averaged 4.56 percent of gross domestic product and 9.12 percent in upper-middle-income economies. An important finding is that countries in Sub-Saharan Africa have housing elasticities similar to comparable low-income and lower-middle-income economies. In financing housing investment, the paper finds that developing countries tend to rely much more on domestic savings and government debt, whereas high-income Organisation for Economic Co-operation and Development countries lever capital markets by tapping foreign savings. Not only does excessive reliance on domestic savings and government debt increase the sensitivity of housing investment to the cyclicality of growth of gross domestic product, it also can potentially crowd out investments in health and education.

Debt Markets --- Domestic Savings --- Economic Theory & Research --- Emerging Markets --- Finance and Financial Sector Development --- Gdp Growth --- Government Debt --- Housing Investment --- Investment and Investment Climate --- Macroeconomics and Economic Growth --- Non Bank Financial Institutions --- Private Sector Development --- Urbanization