58 Pages Posted: 22 Jul 2000
Date Written: July 1990
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: 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