Financial Crises: Theory and Evidence

44 Pages Posted: 22 Jun 2009 Last revised: 26 Jan 2014

See all articles by Ana Babus

Ana Babus

Washington University in St. Louis - Department of Economics

Elena Carletti

Bocconi University - Department of Finance; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Franklin Allen

Imperial College London

Date Written: June 8, 2009

Abstract

Financial crises have been pervasive phenomena throughout history. Bordo et al. (2001) find that their frequency in recent decades has been double that of the Bretton Woods Period (1945-1971) and the Gold Standard Era (1880-1993), comparable only to the Great Depression. Nevertheless, the financial crisis that started in the summer of 2007 came as a great surprise to most people. What initially was seen as difficulties in the US subprime mortgage market, rapidly escalated and spilled over to financial markets all over the world. The crisis has changed the financial landscape worldwide and its costs are yet to be evaluated.

Suggested Citation

Babus, Ana and Carletti, Elena and Allen, Franklin, Financial Crises: Theory and Evidence (June 8, 2009). Available at SSRN: https://ssrn.com/abstract=1422715 or http://dx.doi.org/10.2139/ssrn.1422715

Ana Babus

Washington University in St. Louis - Department of Economics ( email )

One Brookings Drive
St. Louis, MO 63130
United States

Elena Carletti

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Franklin Allen (Contact Author)

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

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