Deciphering the Liquidity and Credit Crunch 2007-08
33 Pages Posted: 19 Dec 2008 Last revised: 1 Apr 2015
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Deciphering the Liquidity and Credit Crunch 2007-08
Deciphering the Liquidity and Credit Crunch 2007-08
Date Written: December 17, 2008
Abstract
This paper summarizes and explains the main events of the liquidity and credit crunch in 2007-08. Starting with the trends leading up to the crisis, I explain how these events unfolded and how four different amplification mechanisms magnified losses in the mortgage market into large dislocations and turmoil in financial markets.
Keywords: Financial Crisis, Bubbles, Liquidity, Liquidity Spirals, Credit Crunch
JEL Classification: E5, G2
Suggested Citation: Suggested Citation
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