Lecture
This lecture covers the Global Financial Crisis of 2008-09, triggered by a liquidity shortfall in the US banking system, leading to a housing bubble and mortgage defaults. It discusses unconventional monetary policies adopted by central banks to stabilize financial markets, including large-scale asset purchases and liquidity provisions. The lecture also explores the impact of the crisis on global stock markets, interbank market pressures, and the responses of major central banks like the Federal Reserve, ECB, and BoJ. Additionally, it delves into concepts like Purchasing Power Parity, the Law of One Price, and the effects of permanent changes in money supply on exchange rates and price levels.