Selected Topics in Macroeconomics - Economic Crises (V)
Advanced Lecture Course
Akt: 02.06.2022 13:49
Tue, 10:00 - 12:00
(Hs 104 Hörsaal)
Content & learning objectives:
This Masters-level course introduces the theory of financial crises. The theory is discussed against the backdrop of the recent financial crises of 2007/2008 and other historical accounts of previous financial-, banking-, and currency crises. Many of these crises can be viewed as coordination games where markets suddenly swing from a socially efficient equilibrium to a socially inefficient equilibrium. An emphasis on the analysis of coordination will overarch this course and lead us to the current frontier of the research on financial crises.
In this course, students learn why financial crises occur, how they evolve, and by which means they can be prevented or, as the case may be, resolved. They should become familiar with modern methods of solving coordination games and learn to apply these methods in the context of financial crises models.
Planned course structure:
Part I. Characteristics and Origins of Financial Crises
Historical overview of financial crises
The anatomy of a typical crisis
The role of speculation for financial crises
(Rational) asset price bubbles
Part II. Banking Crises
Moral hazard in banking
Part III. The Financial Crises of 2007/2008
Historical overview of the subprime crisis of 2007/2008
Part IV. Currency Crises
Refreshment of open-economy monetary economics
1st Generation Currency crises
2nd Generation Currency crises
3rd Generation Currency crises (Connection between banking and currency crises)
Allen, Franklin and Douglas Gale (2007). Understanding Financial Crises. Oxford: Oxford University Press.
Kindleberger, Charles P. and Robert Z. Aliber (2011). Manias, Panics, and Crashes: A History of Financial Crises. New York: Palgrave Macmillan.
Research articles supporting each lecture will be litsed during the course.