Question: Is the neoclassical model correct in its prediction that there will be a global equilibrium in which all nations have the same real GDP per person? China is 200 times the population of Hong Kong and 4 times the population of the United States. This brings the obvious question: Should we be concerned?
The fall of 2008 saw the biggest financial crisis since the Great Depression. Essentially securities, such as mortgage-backed securities, lost value and many financial institutions became insolvent. These institutions, such as Fannie Mae, Freddie Mac, Bear Sterns, AIG, and others were considered "too large" to fail. Why?