This course is an introduction to the economic theories of financial crises. It focuses on amplification mechanisms that exacerbate crises, such as leverage, fire sales, bank runs, interconnections, and complexity. It also analyzes the different perspectives on the origins of crises, such as mistaken beliefs and moral hazard, and discusses the optimal regulation of the financial system. The course draws upon examples from financial crises around the world, especially the recent subprime financial crisis.
This project is brought to you by the Network for Pluralist Economics (Netzwerk Plurale Ökonomik e.V.). It is committed to diversity and independence and is dependent on donations from people like you. Regular or one-off donations would be greatly appreciated.