Deciphering the Liquidity and Credit Crunch 2007-08

Brunnermeier, Markus K.

doi:10.2139/ssrn.1317454

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Deciphering the Liquidity and Credit Crunch 2007-08

33 Pages Posted: 19 Dec 2008 Last revised: 1 Apr 2015

See all articles by Markus K. Brunnermeier

Markus K. Brunnermeier

Princeton University - Department of Economics

There are 2 versions of this paper

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

Brunnermeier, Markus Konrad, Deciphering the Liquidity and Credit Crunch 2007-08 (December 17, 2008). Available at SSRN: https://ssrn.com/abstract=1317454 or http://dx.doi.org/10.2139/ssrn.1317454