Monday, 23 February 2009
Financial Crisis Course
The horror show continues...statistics on industrial and output production are horrible (with Japan recording a particularly impressive slump of GDP by 12.7% in the last quarter), stock markets got off to the worst start to the year in recorded history (the S+P-500 just did, as of today), and unemployment is surging almost everywhere. With this as background, I no longer really need to put up one of my all-time favourite charts (from Brad Delong) to motivate why it might be interesting to look at financial crises. I revamped my course on Bubbles, Crashes, and Crises for the 2008-09 edition of the ITFD master. You can have a peek here. I included the latest overview paper by Reinhart and Rogoff, and a module on subprime. Together with the interesting work that Lorenzoni, Matsuyama and others have been doing on how credit booms can lead to inefficient investment, I think there should be plenty here to speak to the context and background of the current crisis.