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Asymmetric Information and Financial Crises: a Historical Perspective

58 Pages Posted: 22 Jul 2000 Last revised: 5 Oct 2009

Frederic S. Mishkin

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Date Written: July 1990

Abstract

This paper examines the nature of financial crises from a historical perspective using the new and burgeoning literature on asymmetric information and financial structure. After describing how this literature helps to understand the nature of financial crises, the paper focuses on a historical examination of a series of financial crises in the United States, beginning with the panic of 1857 and ending with the stock market crash of October 19,1987. The asymmetric information approach explains the patterns in the data and many features of these crises which are otherwise hard to explain. It also suggests why financial crises have had such important consequences for the aggregate economy over the past one hundred and fifty years.

Suggested Citation

Mishkin, Frederic S., Asymmetric Information and Financial Crises: a Historical Perspective (July 1990). NBER Working Paper No. w3400. Available at SSRN: https://ssrn.com/abstract=232070

Frederic Mishkin (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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