- Title
- A Crash Course on the Euro Crisis
- Author(s)
- Markus K. Brunnermeier Markus Brunnermeier (Princeton University)
- Ricardo Reis Ricardo Reis (LSE)
- Abstract
- The financial crises of the last twenty years brought new economic concepts into classrooms discussions. This article introduces undergraduate students and teachers to seven of these models: (i) misallocation of capital inflows; (ii) modern and shadow banks; (iii) strategic complementarities and amplification; (iv) debt contracts and the distinction between solvency and liquidity; (v) the diabolic loop; (vi) regional flights to safety; and (vii) unconventional monetary policy. We apply each of them to provide a full account of the euro crisis of 2010-12.
- Creation Date
- 2019-08
- Section URL ID
- Paper Number
- 2019-14
- URL
- https://scholar.princeton.edu/sites/default/files/markus/files/19-crashcourse.pdf
- File Function
- Jel
- E44, F32, G01
- Keyword(s)
- Amplification, Euro crisis, financial crisis, Pecuniary externalities, safe asset, shadow banking, systemic risk, teaching
- Suppress
- false
- Series
- 13