Table of Contents

Recent Advances in the Analysis of Competition Policy and Regulation

Recent Advances in the Analysis of Competition Policy and Regulation

Edited by Joseph E. Harrington Jr and Yannis Katsoulacos

Bringing scholars and policymakers to the frontiers of research and addressing the critical issues of the day, the book presents original important new theoretical and empirical results. The distinguished contributors include: P. Agrel, K. Alexander, J. Crémer, X. Dassiou, G. Deltas, F. Etro, L. Filistrucchi, P. Fotis, M. Gilli, J. Harrington Jr, T. Huertas, M. Ivaldi, B. Jullien, V. Marques, M. Peitz, Y. Spiegel, E. Tarrantino and G. Wood.

Chapter 18: Fixing Finance: Are We There Yet?

Thomas F. Huertas

Subjects: economics and finance, competition policy


Thomas F. Huertas1 Crises are costly. The crisis that started in August 2007 has already cost society over six trillion euros in lost output, and it will cost trillions more. Output in most industrialized countries remains significantly below the level that it would have reached had the pre-crisis trend rate of growth continued. The crisis also poses a threat to the public finances in the USA, the UK and, most significantly, in the Eurozone, and failure to address these problems could cause the world economy to plunge once again into turmoil. It will be many years, if ever, before the economy again reaches the pre-crisis trend line. According to a World Bank forecast global gross domestic product (GDP) in 2015 will still not have caught up to the level of GDP that it would have reached had the pre-crisis trend rate of growth continued (Figure 18.1). The present value of that future output shortfall is 8.5 trillion euros; so the total cost of the crisis is likely to be on the order of 15 trillion euros or over 30 per cent of the level of pre-crisis global GDP. These losses will magnify if the recovery stalls or a double dip occurs (Huertas, 2011a, pp. 1–2). That could well occur if governments cannot bring sovereign debt back under control. Accordingly, there is some possibility that we may trillions Global GDP Output gap 2006 2007 2008 2009 2010 2011 2012 actual 2013 2014 2015 pre-crisis trend Figure 18.1 Crisis Depresses Global...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information