Crisis Economics

This course analyzes the economics of financial crises, starting from the preceding run-up and credit market froth, to how crises are initially triggered, amplified, and propagated to the broader macroeconomy. We will devote considerable time to the workings of the financial system, especially financial intermediation and the role of the central bank. The course aims to ground this in economic theory and empirical analyses: as such, many of the readings will be recent journal articles and working papers. By the end of this course, students will be familiar with the systematic forces that drive financial fragility, and the tradeoffs that policy makers face before, during, and after the crises. They will be able to apply the framework to analyze real world scenarios and current events.