Busts after periods of prolonged prosperity have been found to be catastrophic. Financial institutions increase their leverage and shift their portfolios towards projects that were previously considered too risky. This results from institutions rationally updating their expectations and becoming...

 

 

In this paper I shall take the causes, developments and economic consequences of the financial dislocations of the last six months as given and generally understood, having already written extensively on this subject, in a more academic vein in the Journal of International Economics and Economic...

No abstract is available.

No Abstract is Available.

On 28-29 June 2007, the Financial Markets Group organised a conference covering topics under all three themes of its title, 'Cycles, Contagion and Crises', from the perspective of both developed and emerging economies.

In this paper we assess the performance of the New Keynesian IS Curve for the G7 countries. We find that there is an IS puzzle for both the purely backwardlooking as well as for the forward-looking IS curve. The real interest rate does not have a significantly negative effect on the output gap....

This paper is a copy of the author’s Per Jacobsson Lecture given at the University of Zurich on an occasion hosted by the Bank for International Settlements on Sunday June 27th, 2004. It is reproduced with the kind permission of the Per Jacobsson Foundation.