Caught Off-Guard by Another Crisis

Jill M. Hendrickson
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Jill M. Hendrickson: University of St. Thomas

Chapter 1 in Financial Crisis, 2013, pp 3-11 from Palgrave Macmillan

Abstract: Abstract Financial crises have a long tradition both in the United States and globally. Despite this, most people were caught by surprise in the fall of 2008 when markets exploded and a global financial crisis commenced in earnest. Could we have been more prepared? Do we have the tools to be more prepared next time? The economics profession relies on theories of all sorts to make sense of what actually happens in the world. For our purposes, economists use theories of financial crises to help explain and understand financial crises. However, only by testing the theories to the data will we learn which are relevant and which are not in today’s world. That is the primary objective of this book — to determine which contemporary theories of financial crises stand up against empirical scrutiny and which do not. Because the health of the financial sector is positively related to the health of the macroeconomy, it is vital to have crises theories which help us understand real-life events.1

Keywords: Business Cycle; Financial Crisis; House Price; Real Sector; Recent Financial Crisis (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-1-137-31105-4_1

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DOI: 10.1057/9781137311054_1

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