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Global Markets > Global Markets > Flashcards

Global Markets Flashcards

1
Q

11/25 commodity prices decline in LR … None had positive trend

A

Harvey et al

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2
Q

Commodity market prices reduce because of fundamentals…. YED of commodities less than other goods

A

Prebisch singer hypothesis

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3
Q

Agreed complacency and over confidence in unregulated markets caused excessive risk taking …. Advocated minsky

A

Martin wolf

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4
Q

Giradi why more financial investors in commodity market

A

Low IR from FED caused search for yield
Deregulation in financial markets
Portfolio diversification after house price decline
influencing futures prices that are benchmark for spot prices

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5
Q

Girardi type of people in financial market

A

Commercial hedgers
SPECULATORS
Money managers
Commodity index funds

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6
Q

New financial architecture

A

Theory of deregulation, caused by emh

Wray

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7
Q

Crotty policy responses in wake of financial crisis

A 
Replace emh
Ban cdo and securitisation 
More regulations 
Smaller financial sector (minsky advocated smaller local banks where they knew borrowers)
System to aliviate speculative bubbles
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8
Q

Friedman

A

Flat world thesis
Levelling the playing field for people worldwide
Anyone can now compete
Helped by Microsoft 3.0, Netscape browser, application software

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9
Q

McCann

A

High skilled industries agglomerate
Low skilled disperse
Transmission vs transaction costs
Tacit knowledge more as tech increased

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10
Q

Florida

A

Spiky world

Spread of clusters where inter connectedness has increased

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11
Q

Baldwins first unbundling

A

Cheaper transport allowed separation of production and market
North industrialised & south deindustrialised
Large income divergence between N&S
large surge in international trade and migration
Production clustered locally and dispersed globally

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12
Q

Baldwins second unbundling

A

Spread of ICT made it easier to communicate and coordinate at distance
Reversal of income divergence
South industrialises north deindustrialises
Trade-investment-services-IP nexus
Join supply chains not build them
Liberalisation (RTA’s)

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13
Q

Baldwins GVC’s governed by….

A

Battle between agglomeration and dispersion forces

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14
Q

Benefits of agglomeration

A 
Demand and supply side linkages
Knowledge spillovers (TACIT KNOWLEDGE, face to fact contact)
Labour supply
Motivation
Observation
Innovation
Business environment 
Reputation
Builds trust and relationships
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15
Q

Threshold effect

A

Cluster gets so big starts experiencing diseconomies of scale…. Some firms may move on

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16
Q

Cooks centrifugal and centripetal forces

In city of London

A

Centrifugal: labour supply, reputation, being close to suppliers
Centripetal, congested transport, regulations, cost of locating there

17
Q

Porter how do clusters affect competition

A

Increase productivity
Driving innovation
Stimulate formation of new businesses

18
Q

McCorriston commodity markets shocks D&S

A

Stated that the impact of shocks depended where you were on the diagram (I.e. How many stocks you had)
KINKED DEMAND CURVE
LOW ELASTICITY OF DEMAND AND SUPPLY =INELASTIC

19
Q

Hellbling reasons why prices rose so high in financial crisis

A

1) emerging growth of financial markets
2) suppliers slow to respond to increased demands
McCorriston added som countries intervened to impose export quotas also raising prices

20
Q

UNCTADS policy responses to increased financials satin of commodity markets

A

Tax high frequency trading
Make details on fundermentals more transparent/ better info
Establish scheme to deal with speculative bubbles
Tightening financial regulations

21
Q

Financial investors in commodity markets

A
22
Q

Giradi futures prices used as benchmark for spot prices

A

Growth in futures so steep could have only been caused by speculative borrowers as production did not increase by same amount over that time
Can separate price from that what should be justified under fundermentals

23
Q

What happened in financial crisis

A

Savings glut…. Low IR… Innovation of securitisation…. Easy credit… Perverse incentives causing change of attitude… SIV…. Moral hazard of insurance and CDS… All created boom …. When it went bust people had lost a lot of money as CDO’s priced wrong (non transparent)so emh doesn’t work

Global Markets (1 decks)

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