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Explaining financial crises: a cyclical approach

This book develops a new theoretical approach to the explanation of systemic financial crises in industrial and emerging market countries. In contrast to standard models, the present cyclical approach is consistent with the following three stylized facts. Firstly, systemic financial crises are a recurrent phenomenon generally accompanied by excessive boom-bust cycles. Secondly, the frequency of financial crisis cycles is very irregular. Thirdly, most financial crisis cycles are initiated by positive shocks to profit expectations which induce an unsustainable build-up of financial fragility driven by irrational exuberance. The present approach is based on a sophisticated balancesheet structure with many assets, as well as on an expectation formation scheme which combines the rational expectations hypothesis with Keynes’ Beauty Contest Theory.

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Detail Information
Series Title
Hohenheimer volkswirtschaftliche Schriften ; Bd. 53
Call Number
332 RAC e
Publisher
New York : P. Lang.,
Collation
xix, 410 p. ; 21 cm.
Language
English
ISBN/ISSN
9783631754375
Classification
332
Content Type
-
Media Type
-
Carrier Type
-
Edition
-
Subject(s)
Financial crises
Business cycles
Specific Detail Info
-
Statement of Responsibility
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