Surviving large losses: financial crises, the middle class, and the development of capital markets

Gilles Postel-Vinay, Philip Hoffman and Jean-Laurent Rosenthal
Additional contact information
Jean-Laurent Rosenthal: CS CALTECH - Computer Science Department - CALTECH - California Institute of Technology

Post-Print from HAL

Abstract: Financial disasters often have long-range institutional consequences. When financial institutions - banks, insurance companies, brokerage firms, stock exchanges - collapse, new ones take their place, and these changes shape markets for decades or evne generations. Surviving large losses explains why such financial crises occur, why their effects last so long, and what political and economic conditions can help countries both rich and poor survive - and even prosper - in the aftermath. Looking at past and more recent financial disasters through the lens of political economy, the authors identify three factors critical to the development of financial institutions: the level of government debt, the size of the middle class, and the quality of information that is available to participants in financial transactions. They seek to find out when these factors promote financial development and mitigate the effects of financial crises and when they exacerbate them. Although there is no panacea for crises - no one set of institutions that will resolve them - it is possible, the authors argue, to strengthen existing financial institutions, to encourage economic growth, and to limit the harm that future catatrophes can do.

Keywords: Financial; crises (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Published in The Belknap press of Harvard university press, 263 p., 2007

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Surviving Large Losses: Financial Crises, the Middle Class, and the Development of Capital Markets (2009)
Working Paper: Surviving Large Losses: Financial Crises, the Middle Class, and the Development of Capital Markets (2009)
Working Paper: Surviving large losses: financial crises, the middle class, and the development of capital markets (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00826238

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().