Causes of the Financial Crisis: An Assessment using UK Data

Christopher Martin and Costas Milas

Department of Economics Working Papers from University of Bath, Department of Economics

Abstract: We present empirical evidence that the marked rise in liquidity in 2001-2007 was due to large and persistent current account deficits and loose monetary policy. If this increase in liquidity was a pre-condition for the financial crisis that began in July 2007, we can conclude that loose monetary and the deterioration in current account balances were causes of the financial crisis.

Keywords: financial crisis; liquidity; monetary policy; global imbalances (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-fdg, nep-mac and nep-opm
Date: 2009

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Working Paper: Causes of the Financial Crisis: an Assessment Using UK Data (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:eid:wpaper:15961

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