The Complexities of the Financial Turmoil of 2007 and 2008

28 Pages Posted: 13 Oct 2008 Last revised: 19 Oct 2008

See all articles by Gregory A. Krohn

Gregory A. Krohn

Bucknell University - Department of Economics

William R. Gruver

Bucknell University

Date Written: October 7, 2008

Abstract

Sparked by rising defaults on subprime mortgages, the financial turmoil of 2007 and 2008 threatened the stability of the worldwide financial system and led to unprecedented interventions in financial markets by central banks and other governmental institutions. This essay describes and explains the complexities of the financial turmoil of 2007 and 2008 for students of the financial system so that they might understand better how problems in the mortgage market led to the possibility of collapse of the financial system and the controversial actions taken by the Federal Reserve and other governmental entities. We draw several lessons about the behavior of financial markets and financial regulation from this historic episode.

Keywords: finance, crisis, markets, turmoil, complexity, subprime, meltdown

JEL Classification: E44, E58, G21, G24, G28

Suggested Citation

Krohn, Gregory A. and Gruver, William R., The Complexities of the Financial Turmoil of 2007 and 2008 (October 7, 2008). Available at SSRN: https://ssrn.com/abstract=1282250 or http://dx.doi.org/10.2139/ssrn.1282250

Gregory A. Krohn (Contact Author)

Bucknell University - Department of Economics ( email )

Lewisburg, PA 17837
United States
570-577-3448 (Phone)
570-577-3451 (Fax)

William R. Gruver

Bucknell University ( email )

701 Moore Ave.
Lewisburg, PA 17837
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
2,375
Abstract Views
7,776
rank
8,427
PlumX Metrics