Andrew Rose, Mark Spiegel, 03 August 2009

The 2008 global financial crisis has led to renewed calls for “early warning models” to reduce the risks of future crises. But this column says that few of the characteristics suggested as potential causes of the crisis actually help predict the intensity and severity of the crisis across countries. That bodes poorly for the performance of future early warning models.

Gareth Campbell, 23 May 2009

Can financial crises be averted by identifying and dealing with overpriced assets before they cause instability? This column argues that during the British Railway Mania of the 1840s, railway shares were not obviously overpriced, even at the market peak, but prices still fell dramatically. This suggests that extreme asset price reversals can be difficult to forecast and prevent ex ante, and the financial system always needs to be prepared for substantial price declines.

Prakash Kannan, Marco Terrones, Alasdair Scott, 06 May 2009

Two features of the current recession – its association with a deep financial crisis and its highly synchronised nature – suggest that it is likely to be unusually severe and followed by a weaker-than-average recovery. Current and near- term policy responses are the key to understand how the recession will evolve this time.

Eduardo Cavallo, Alejandro Izquierdo, 28 March 2009

This column examines the lessons of Latin America’s experience with sudden stops in capital inflows during the 1990s and applies them to the current crisis. While it is most important to be well prepared, today’s policy reactions will determine how well countries handle the crisis.

Carmen Reinhart, 26 January 2009

Financial crises are historically associated with the “4 deadly D’s”: Sharp economic downturns follow banking crises; with government revenues dragged down, fiscal deficits worsen; deficits lead to debt; as debt piles up rating downgrades follow. For the most fortunate countries, the crisis does not lead to the deadliest D: default, but for many it has.

Frank Heinemann, 26 October 2008

The dizzying falls in equity prices seem to have stopped. If they restart, it may be time for radical measures. This column suggests one motivated by bubble theory. The Fed could temporarily guarantee a lower bound for the S&P 500 through targeted purchases of market portfolios via open-market operations and financed by injecting cash.

Nicholas Bloom, 08 October 2008

The crisis is shaping up to be a perfect storm – a huge surge in uncertainty that is generating a rapid slow-down in activity, a collapse of banking preventing many of the few remaining firms and consumers that want to invest from doing so, and a shift in the political landscape locking in the damage through protectionism and anti-competitive policies.

Javier Suarez, 27 March 2008

Lender of Last Resort interventions aren’t working. It is time for more radical thinking. This column argues for the creation of a “Emergency Bank Debt Insurance Mechanism” that would go beyond Lender of Last Resort interventions. It would short-circuit the panic logic by temporarily providing full coverage to any short-term lending explicitly supported by the insurer.

Willem Buiter, 19 December 2007

What caused the current North Atlantic financial crisis, how can it be fixed and how can the likelihood of future crises be reduced? This column introduces a new CEPR Policy Insight, 'Lessons from the 2007 Financial Crisis', which addresses these issues at length.

Michael Bordo, 17 December 2007

There is a strong tendency in the media and policy circles to view each crisis as totally new and unexpected. Financial crises, however, are as old as financial markets. Here are the lessons drawn by one of the world’s leading economic historians of financial crises.

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