Growing Up to Stability? Financial Globalization, Financial Development and Financial Crises

59 Pages Posted: 22 Jun 2015

See all articles by Michael D. Bordo

Michael D. Bordo

Rutgers University, New Brunswick - Department of Economics; National Bureau of Economic Research (NBER)

Christopher M. Meissner

University of California, Davis

Date Written: June 2015

Abstract

Why did some countries learn to grow up to financial stability and others not? We explore this question by surveying the key determinants and major policy responses to banking, currency, and debt crises between 1880 and present. We divide countries into three groups: leaders, learners, and non-learners. Each of these groups had very different experiences in terms of long-run economic outcomes, financial development, financial stability, crisis frequency, and their policy responses to crises. The countries that grew up to financial stability had rule of law, democracy, political stability and other institutional features highlighted in the literature on comparative development. We illustrate this by way of case studies for three kinds of financial crises for four countries (Argentina, Australia, Canada, and the United States) over the long-run.

Suggested Citation

Bordo, Michael D. and Meissner, Christopher M., Growing Up to Stability? Financial Globalization, Financial Development and Financial Crises (June 2015). NBER Working Paper No. w21287. Available at SSRN: https://ssrn.com/abstract=2621341

Michael D. Bordo (Contact Author)

Rutgers University, New Brunswick - Department of Economics ( email )

New Brunswick, NJ
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Christopher M. Meissner

University of California, Davis ( email )

One Shields Avenue
Davis, CA 95616
United States

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