Some Reflections on the Recent Financial Crisis

  • Gary Gorton


Economic growth involves metamorphosis of the financial system. Forms of banks and bank money change. These changes, if not addressed, leave the banking system vulnerable to crisis. There is no greater challenge in economics than to understand and prevent financial crises. The financial crisis of 2007-2008 provides the opportunity to reassess our understanding of crises. All financial crises are at root bank runs, because bank debt—of all forms—is vulnerable to sudden exit by bank debt holders. The current crisis raises issues for crisis theory. And, empirically, studying crises is challenging because of small samples and incomplete data.


Financial Crisis Central Bank Banking System Private Bank Recent Financial Crisis 
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© Springer India 2014

Authors and Affiliations

  1. 1.Yale School of ManagementNew HavenUSA

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