Lessons from the Subprime Meltdown

This paper uses Hyman P. Minsky's approach to analyze the current international financial crisis, which was initiated by problems in the American real estate market. In a 1987 manuscript, Minsky had already recognized the importance of the trend toward securitization of home mortgages. This paper identifies the causes and consequences of the financial innovations that created the real estate boom and bust. It examines the role played by each of the key playersincluding brokers, appraisers, borrowers, securitizers, insurers, and regulatorsin creating the crisis. Finally, it proposes short-run solutions to the current crisis, as well as longer-run policy to prevent it (a debt deflation) from happening again

The Political Viability of Carbon Pricing: Policy Design and Framing in British Columbia and California

The adoption of climate policies with visible, substantial costs for households is uncommon because of expected political backlash, but British Columbia\u27s carbon tax and California\u27s cap-and-trade program imposed such costs and still survived vigorous opposition. To explain these outcomes, this paper tests hypotheses concerning policy design, framing, energy prices, and elections. It conducts universalizing and variation-finding comparisons across three subcases in the two jurisdictions and uses primary sources to carry out process tracing involving mechanisms of public opinion and elite position taking. The paper finds strong support for the timing of independent energy price changes, exogenous causes of election results, reducing the visibility of carbon pricing, and using public-benefit justifications, as well as some support for making concessions to voters. By contrast, the effects of the use of revenue, industry exemptions/compensations, and making polluters pay are not uniform, because the former depends on how it is embedded in coalition building efforts and a middle path between exempting or compensating industry and burdening it appears to be more effective than pursuing just one or the other approach