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The Crisis: Basic Mechanisms and Appropriate Policies

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  • Mr. Olivier J Blanchard

Abstract

The purpose of this lecture is to look beyond the complex events that characterize the global financial and economic crisis, identify the basic mechanisms, and infer the policies needed to resolve the current crisis, as well as the policies needed to reduce the probability of similar events in the future.

Suggested Citation

  • Mr. Olivier J Blanchard, 2009. "The Crisis: Basic Mechanisms and Appropriate Policies," IMF Working Papers 2009/080, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2009/080
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    References listed on IDEAS

    as
    1. Ricardo J. Caballero & Arvind Krishnamurthy, 2008. "Collective Risk Management in a Flight to Quality Episode," Journal of Finance, American Finance Association, vol. 63(5), pages 2195-2230, October.
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    4. Markus K. Brunnermeier, 2009. "Deciphering the Liquidity and Credit Crunch 2007-2008," Journal of Economic Perspectives, American Economic Association, vol. 23(1), pages 77-100, Winter.
    5. Christopher L. Foote & Kristopher Gerardi & Lorenz Goette & Paul S. Willen, 2008. "Subprime facts: what (we think) we know about the subprime crisis and what we don’t," Public Policy Discussion Paper 08-2, Federal Reserve Bank of Boston.
    6. Gary Gorton, 2008. "The panic of 2007," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 131-262.
    7. Gary Gorton, 2009. "The Subprime Panic," European Financial Management, European Financial Management Association, vol. 15(1), pages 10-46, January.
    8. Shleifer, Andrei & Vishny, Robert W, 1997. "The Limits of Arbitrage," Journal of Finance, American Finance Association, vol. 52(1), pages 35-55, March.
    9. Stijn Claessens & M. Ayhan Kose & Marco E. Terrones, 2009. "What happens during recessions, crunches and busts? [Business cycles for G-7 and European countries]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 24(60), pages 653-700.
    10. Gary Gorton, 2009. "The Subprime Panic," European Financial Management, European Financial Management Association, vol. 15(1), pages 10-46, January.
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    More about this item

    Keywords

    WP; asset; investor; bank; price; value; Financial Crisis; Credit; Liquidity; Spending; Leverage; asset price booms; subprime loan; a number of asset class; off-balance sheet assets; value of the assets; credit rationing; asset purchase; issued assets; Mortgages; Financial statements; Housing prices; Emerging and frontier financial markets; Global;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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