国際教養学部 AO入試 補助教材 financial crisis and 'normal' recession

  

Read the following article, underlined by Sasaki, and answer the questions.

Forget a 2008 Lehman Bros-style crash – this is how a ‘normal’ recession could start

Current political uncertainty or trade restrictions could shock business confidence, but policymakers are fixated on finance   

Dan Davies　　　Fri 16 Aug 2019 

https://www.theguardian.com/commentisfree/2019/aug/16/2008-lehman-brothers-crash-normal-recession-finance

Questions

1.    According to the proverb the author mentioned, when a financial crisis occur?

                                                                                                    

                                                                                                   

2.    According to the author, how does a ‘normal’ recession occur?

                                                                                                    

                                                                                                   

3.    Do you think a normal recession can happen soon? How can we prevent it from happening?

                                                                                                   

                                                                                                   

                                                                                                    

                                                                                                   

                                                                                                   

4.    Name another issue that erosion of memory due to passage of time is a serious problem in preventing it from repeating. Explain why you think so.

                                                                                                   

                                                                                                   

                                                                                                   

                                                                                                    

Answer Keys

1.      According to the proverb the author mentioned, when a financial crisis occur?

A financial crisis happens when those who actually experienced the last crisis are not in charge of the financial activities due to old age or death.

2.      According to the author, how does a ‘normal’ recession occur?

What the author calls normal recession, not a systematic financial crisis like the one in 2008, is an economic stampede. It is caused by fear of losing money, which causes chain reaction of less spending, leading to economic stagnation in a wide area. The fear is triggered by a shocking incident related to business confidence such as political uncertainty or trade restrictions.

3.      Do you think a normal recession can happen soon? How can we prevent it from happening?

I think a normal recession can happen soon. As the author says, most of the people in the financial sector who remember the last normal recession, which occurred in the 90’s, are retired, so there is no one who can sense the event that can trigger a recession. Also, again as the author mentions, political uncertainty and trade restrictions are rife. Trump’s severe protectionism, which poses high tariffs on imports based on the idea of America First, and retaliation from China, a major exporter to the United States, and recent trade restrictions between Japan and South Korea are the examples. We should remind ourselves of the lesson in the history textbook, the Great Depression, which was also caused by loss of confidence in the stock market. We could also use AI as a reminder of a recession by making it learn about the past recessions and current political and economic situations.

4.      Name another issue that oblivion, weathering of memory due to passage of time, is a serious problem in preventing it from repeating. Explain why you think so.

The use of nuclear weapons is one of such issues. Nuclear weapons were used almost 75 years ago and most of the victims are no longer with us. Even in Japan, the memory is fading. Although it is impossible for the experience to be fully shared between those who actually know it and the others, we must make efforts to pass down the knowledge of the horror of this weapon, whose massive use could wipe out most species before climate change does it, to next generations and around the world.