Dethier, Jean-JacquesMorrill, Curtis2014-08-292014-08-292012-11https://hdl.handle.net/10986/19882This paper describes the serious fiscal crisis faced by cities around the world following the Great Recession of 2008. Five years later, the after-effects of this major crisis continue to be felt and limit economic opportunities in cities. Section 1 summarizes how the crisis was triggered and how it unfolded in the US, then spread to the rest of world -- highlighting the links between financial sector and housing sector. Section 2 discusses the impact of the crisis on urban revenue and expenditure, and the stimulus programs and recovery plans devised as a short term response by cities around the world. Section 3 then discusses longer term strategies to ensure the financial, social and environmental sustainability of cities. The authors make the point -- and back up our assertions with specific examples -- that urban decision-makers must take a long view and find ways to create opportunities for their citizens, making sure that their decisions are financially sustainable in the long term. Today's decisions should not lock cities out of options tomorrow, and cities must be managed with flexibility so as to adapt to unforeseen new circumstances. The authors also argue that, while there has been a lot of talk about "smart cities" and new technologies among urban specialists and urban planners, it is ultimately the focus on basic economics (sustainable financing, providing good services to consumers and incentives for providers), good governance and good institutions that will create sustainable, dynamic and livable cities.en-USCC BY 3.0 IGOACCESS TO CAPITALACCOUNTINGACCOUNTING SYSTEMSADVANCED ECONOMIESAUTONOMYBAILOUTBALANCE SHEETBANK LOANSBANK POLICYBANKING CRISISBANKING INSTITUTIONSBANKING SYSTEMBANKRUPTCYBANKSBIDBONDBOND ISSUERSBONDSBORROWERBORROWINGBORROWING CAPACITIESBORROWING COSTSBUDGET DEFICITSCAPACITY BUILDINGCAPITAL FORMATIONCAPITAL MARKETSCENTRAL BANKSCENTRAL GOVERNMENTSCOMMERCIAL BANKSCOMMODITY PRICESCONSUMER CREDITCREDIT MARKETSCREDIT QUALITIESCREDITORSCREDITWORTHINESSCURRENT ACCOUNTCURRENT ACCOUNT DEFICITSCURRENT EXPENDITURESDEBTDEBT CRISISDEBT OBLIGATIONSDECENTRALIZATIONDEFAULTSDEFICITSDERIVATIVEDERIVATIVE PRODUCTSDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT AUTHORITIESDEVELOPMENT FINANCEDEVOLUTIONDOMESTIC CAPITALDURABLEDURABLE GOODSECONOMIC ACTIVITYECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC OPPORTUNITIESEMERGING MARKETSEMPLOYERSEMPLOYMENTENVIRONMENTAL DEGRADATIONENVIRONMENTAL SUSTAINABILITYEQUITY MARKETSEQUITY RATIOEUROPEAN CENTRAL BANKEXCESS LIQUIDITYEXPENDITUREEXTERNAL SHOCKSEXTERNALITIESFEDERAL RESERVEFINANCIAL CRISISFINANCIAL DEREGULATIONFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTFINANCIAL MANAGEMENTFINANCIAL MARKETFINANCIAL MARKETSFINANCIAL SERVICESFINANCIAL STABILITYFINANCIAL STRESSFINANCIAL SUSTAINABILITYFINANCIAL SYSTEMFINANCIAL SYSTEMSFISCAL AUTONOMYFISCAL DEFICITSFISCAL FEDERALISMFISCAL POLICYFLOW OF CAPITALFORECLOSURESFOREIGN CAPITALFOREIGN DIRECT INVESTMENTFOREIGN INVESTMENTGOVERNMENT FUNDINGGOVERNMENT INVESTMENTSGOVERNMENT SPENDINGGOVERNMENT SUPPORTHEDGE FUNDSHOLDINGSHOUSEHOLDSHOUSINGHOUSING PRICESHUMAN CAPITALINFORMAL ECONOMYINFRASTRUCTURE DEVELOPMENTINFRASTRUCTURE INVESTMENTINFRASTRUCTURE INVESTMENTSINSTITUTIONAL BARRIERSINSURANCEINSURANCE COMPANIESINSURANCE COMPANYINTEREST RATEINTEREST RATE POLICYINTEREST RATESINTERGOVERNMENTAL TRANSFERSINTERNATIONAL BANKINVESTMENT BANKINVESTMENT CLIMATEINVESTMENT CORPORATIONSINVESTMENT DECISIONINVESTMENT DECISIONSINVESTMENT FUNDINVESTMENT PROJECTSINVESTMENT SPENDINGINVESTMENT STRATEGIESJOB OPPORTUNITIESLABOR UNIONSLAND PRICESLARGE CITIESLEGAL CONSTRAINTSLEGAL FRAMEWORKSLEGISLATIONLIQUIDITY CRISISLOCAL CAPITAL EXPENDITURESLOCAL ECONOMIESLOCAL ECONOMYLOCAL GOVERNMENTLOCAL GOVERNMENTSLOCAL INFRASTRUCTURELOCAL PUBLIC FINANCELOW INTEREST RATELOW-INCOME BORROWERSMARKET STABILITYMARKET VALUEMETROPOLITAN AREASMICROFINANCEMIGRANT WORKERSMONETARY FUNDMONETARY POLICYMONEY MARKETMONEY MARKETSMORTGAGEMORTGAGE DEBTMORTGAGE MARKETMORTGAGE SECURITIESMORTGAGESMULTINATIONALMUNICIPAL DEVELOPMENTMUNICIPAL GOVERNMENTSMUNICIPALITIESMUTUAL FUNDSNATURAL RESOURCESONLINE SYSTEMPENSIONPENSION FUNDSPRIVATE CAPITALPRIVATE INVESTMENTPRIVATE INVESTORSPRODUCTIVITYPROPERTY TAXESPUBLIC DEBTSPUBLIC FINANCESPUBLIC INVESTMENTPUBLIC INVESTMENTSPUBLIC SERVICESPUBLIC TRANSPORTPUBLIC TRANSPORTATIONRATING AGENCIESREAL ESTATEREAL PROPERTYRECESSIONRECESSIONSREINVESTMENTREINVESTMENTSREMITTANCESRESIDENTIAL MORTGAGERETURNSREVENUE SHARINGRISK MANAGEMENTRISK MANAGEMENT STRATEGIESSAVINGSSECONDARY MORTGAGE MARKETSECURITIESSHORT-TERM FINANCINGSOCIAL CAPITALSOCIAL SERVICESSOCIAL WELFARESOVEREIGN DEBTSTART-UPSSUBNATIONAL FINANCESUBNATIONAL GOVERNMENTSTAXTAX COMPLIANCETAX RATESTAX REFORMTELECOMMUNICATIONSTRADE UNIONSTRANCHESTRANSITION COUNTRIESTRANSPORTTREASURYTREATYUNEMPLOYMENTUNIONURBAN AREASURBAN CONGESTIONURBAN DEVELOPMENTURBAN ECONOMIESURBAN GOVERNMENTSURBANIZATIONVILLAGESWEALTH EFFECT10.1596/1813-9450-6256