FINANCIAL RENT, DEBT AND CRISIS

Abstract

Financial crises have some common features even if they come into being in different areas and countries with different income level. Especially due to the financial liberalization and entegration of world economies, they affect many countries with a domino effect. Internationalization of capital stregthens particularly financial markets in developed countries and leads to speculative opportunities and possibilities of very high profit rates. Ambition for higher profit, from time to time, gives rise to fictitious structures, eliminating rational market behaviors. Problems of higher indebtedness and current account deficit in large economies such as the US lead to speculative bubles supported by financial derivatives, making nonproductive short term portfolio investments profitable. Before crisis, it is observed that this type of financial structures become common and real estate prices rise. And following crisis it is observed that public finance discipline deteriorate.

Keywords

• Finansal Kriz
• Finansal liberalizasyon
• Rant
• Financial Crisis
• Financial Liberalization
• Debt
• Rent.