The financial system and roots of crisis

Chapter 1 introduces the topic of financial crises and discusses the outline of the book. Financial crises have occurred for centuries, and after the Great Recession of 2008 which began in the US and spread globally, both economists and policy makers have realized that economically developed countries are not immune from such phenomena. This book seeks to describe and analyze the events, causes, and outcomes of crises from the Great Depression to the Great Recession, unifying a vast amount of literature on each crisis. We start from a general discussion of the global financial system and the roots of crises, both theoretical and empirical. We then discuss crises between 1929 and 2011. We briefly discuss select events before 1929, but focus on the Great Depression and beyond since these crises were created within or bore the current policies and institutions of our current financial system. Keywords: financial crises