Understanding Financial Crises (Paperback)

Paperback. What causes a financial crisis? Can financial crises be anticipated or even avoided? What can be done to lessen their impact? Should governments and international institutions intervene? Or should financial crises be left to run their course? In the aftermath of the recent Asian financial crisis, many blamed international institutions, corruption, governments, and flawed macro and microeconomic policies not only for causing the crisis but also unnecessarilylengthening and deepening it.Based on ten years of research, the authors develop a theoretical approach to analyzing financial crises. Beginning with a review of the history of financialcrises and providing readers with the basic economic tools needed to understand the literature, the authors construct a series of increasingly sophisticated models. Throughout, the authors guide the reader through the existing theoretical and empirical literature while also building on their own theoretical approach. The text presents the modern theory of intermediation, introduces asset markets and the causes of asset price volatility, and discusses the interaction of banks and markets. Thebook also deals with more specialized topics, including optimal financial regulation, bubbles, and financial contagion. What causes a financial crisis? Can crises be anticipated or even avoided? Should governments and international institutions intervene? Based on ten years of research, the authors develop a theoretical approach to analyzing financial crises and use the latest economic theories to begin to understand the causes and consequences of financial crises. This item is printed on demand. Shipping may be from multiple locations in the US or from the UK, depending on stock availability.…