7894bdb0_brary_of_Economics_and_Liberty__ast_Highlights_HIDE_HIGHLIGHTS
[Time] 0:36
Intro. [Recording date: November 9, 2009.] Book ambitious research project. What's the goal of the project; summarize? Wanted to provide and analysis of crises that look for recurring patterns in a quantitative way. Big inspiration is Kindleberger's classic work on financial crises; narrative. What are the cycles that lead up to these big blowouts? Do countries start to borrow and live beyond their means? Do their asset markets develop bubbles? Do their consumer savings rates plummet? Look at a wide range of different kinds of crises, and try to categorize what they have in common within each category. Different varieties: the kind we just saw, financial, or in the old days, called banking crises. Currency crashes: collapses in the foreign exchange market, for example, Asia in 1997-1998, simultaneously had the banking crisis and a currency crash. Government debt crises--sovereign debt crises, when a government stops paying its debt to foreigners--good documentation of those episodes in the economic literature: involve powerful creditor, creditor in NY or in London. What is much less documented is domestic debt crises: What happens when the government defaults on the local citizens? Inflation crises. Also have currency crashes along the lines of what has recently been quantified by Barro and Ursua. Five big varieties, and stock market on top of that, so six; and they do share characteristics.
Reinhart on Financial Crises | EconTalk | Library of Economics and Liberty