Haircuts

Gary Gorton and Andrew Metrick

No 15273, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: When "confidence" is lost, "liquidity dries up." We investigate the meaning of "confidence" and "liquidity" in the context of the current financial crisis. The financial crisis is a manifestation of an age-old problem with private money creation, banking panics. We explain this and provide some evidence with respect to the current crisis.

JEL-codes: G0 G1 G14 G3 (search for similar items in EconPapers)
Date: 2009-08
New Economics Papers: this item is included in nep-cba and nep-mon
Note: AP CF EFG ME
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Citations: View citations in EconPapers (9)

Published as Gary Gorton & Andrew Metrick, 2010. "Haircuts," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 507-520.

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