糖心视频

糖心视频
糖心视频

Economics 567

Financial Crises, Market Crashes, and Economic Depressions

Summer 2011

Jeffrey Parker

Course Outline and Reading List

 

Part I: Basic Principles and Historical Background

1. Introduction to Economics

A very basic toolkit of economic concepts.

June 13 and 14

  • Dasgupta, Partha, Economics: A Very Short Introduction, Oxford University Press, 2007, Chapters 1 through 6. (Copies should be available in Reed Bookstore.) This is a layperson's introduction to economics that attempts to be totally narrative rather than analytical. We will work through the concepts introduced in the book during the first few days of the class. It should be very easy reading for all, but lacks the graphs and simple equations that are typical in a formal introductory economics course. If you crave the latter, read from the next reading...
  • Optional additional reading: Mankiw, N. Gregory, Principles of Macroeconomics, 5th ed., Cengage Learning, 2008, Chapters 1 through 4 (and, if they pique your interest, 5 through 9). This is a more analytical (but still very simple) treatment of introductory economics concepts. (Six copies are available in Reed Library. Because this is likely enough for everyone, I have not put them on reserve.) 

2. Banking and Financial Markets

Basic concepts and terminology of banking, credit, and financial markets, and their implications for macroeconomic performance.

June 15-21

  • Croushore, Dean, Money and Banking: A Policy-Oriented Approach, Houghton-Mifflin, 2007, Chapters 1 through 10, 12, and 16. This is a fairly readable undergraduate text on money and banking that covers some basic principles and concepts. We will work through it 2-3 chapters per day during the first and second weeks of the session. (Two copies available on reserve in Reed Library.)
  • Additional references:
    • Federal Reserve Bank of Boston, , undated.
    • Mengle, David, "," Federal Reserve Bank of Atlanta Economic Review, 92(4), Fourth Quarter, 2007.
    • Rosen, Richard J., "," Chicago Fed Letter, Number 244, November 2007.
    • Quigley, John M., "," The Economists' Voice, 5(6), Article 2, October 2008.
    • Spong, Kenneth, , 5th edition, Federal Reserve Bank of Kansas City, 2000. (An excellent overview of how financial institutions are regulated in the United States.)

3. Financial Crises: Basics and Historical Overview

Some basics and historical discussion of financial crises and their origins.

June 22-30

  • Kindleberger, Charles P., and Robert Aliber, Manias, Panics, and Crashes: A History of Financial Crises, 5th edition, Wiley, 2005. Chapters 1-5, 8-11. We will study most of this book, though all students will not be asked to read every chapter. (Two copies are available in the Reed Library on reserve. I've asked the Reed Bookstore to obtain a few copies as well.)
  • Reinhart, Carmen S., and Kenneth S. Rogoff, This Time is Different: Eight Centuries of Financial Follies, Princeton University Press, 2009, Chapters 1, 2, 4-8, 10-12. (One copy is currently on reserve and a second one has been requested and should arrive before we read it. I've asked the bookstore to obtain a few copies as well if you would like your own copy.) 

Part II: Detailed Analysis of Historical Episodes

4. The Great Depression and Earlier U.S. Crises

July 5-7

  • Federal Reserve Bank of Boston, "," undated.
  • Strouse, Jean, "The Brilliant Bailout," The New Yorker, November 23, 1998, 62-77.
  • Jalil, Andrew, "," Unpublished manuscript.
  • Friedman, Milton, and Anna Schwartz, A Monetary History of the United States, 1867-1960, Princeton, N.J.: Princeton University Press, 1963, Chapter 7: The Great Contraction, 1929-33. (This chapter is 121 pages long and has been published separately as a book called The Great Contraction. Although there is a lot of detail that is relatively unimportant, there are no sections that can be omitted completely. Extract as much as you can of F&S's interpretation of the events and the Fed's policy response during each of the sub-periods they analyze. Skim past the gory minutia about month-to-month changes in monetary stocks.)
  • Bernanke, Ben, "," American Economic Review 73(3), June 1983, 257-276.
  • Calomiris, Charles W., and Joseph R. Mason, "," American Economic Review 87(5), December 1997, 863-883.
  • Temin, Peter, Lessons from the Great Depression, Cambridge, Mass.: MIT Press, 1989 (Lionel Robbins Lectures), Lectures 1 and 2.

5. Crises of the 1980s and 1990s

July 11-13

U.S. Banks and the Third-World Debt Crisis

  • Sachs, Jeffrey, and Harry Huizinga, "," Brookings Papers on Economic Activity, 1987(2), 555-606. (A detailed look at the severe exposure to developing country debt among leading U.S. banks in the 1980s. Read for the overview, not for the details.)
  • "," Economist, September 12, 1992, 21-23.
  • Schwartz, Anna J., "," Economic Inquiry 27(1), January 1989, 1-19. (Link is to a poor HTML version that, as of 7/1, is missing the first 10 pages. If it doesn't get fixed, I'll find another way to get you access.)

Savings and Loan Crisis of the 1980s

  • Jaffee, Dwight M., "," Journal of Economic Perspectives 3(4), Fall 1989, 3-9.
  • Kane, Edward J., "," Journal of Economic Perspectives 3(4), Fall 1989, 31-47.
  • Curry, Timothy, and Lynn Shibut, "," FDIC Banking Review, 13(2), 2000, 26-35.

Japan in the 1990s

  • Hoshi, Takeo, and Anil K. Kashyap, "," Journal of Economic Perspectives 18 (1), Winter 2004, 3-26.
  • Kanaya, Akihiro, and David Woo, "," Washington: International Monetary Fund, 2000.

Asian Financial Crisis

  • Corsetti, Giancarlo, Paolo Pesenti, and Nouriel Roubini, "What Caused the Asian Currency and Financial Crisis?" Japan and the World Economy 11 (3), 1999, 305-73. (We do not have electronic access to this journal, so these links take you to the NBER Working Paper version, which is split into and .)
  • Radelet, Steven, and Jeffrey D. Sachs, "," Brookings Papers on Economic Activity, 1998 (1), 1-74.

Mexican Currency Crisis

  • Whitt, Joseph A., Jr., "," Federal Reserve Bank of Atlanta Economic Review 81 (1), 1996, 1-20.

    6. The Financial Crisis of 2006-08 and Europe's Current Sovereign Debt Problems

    July 14-19

    • Reinhart and Rogoff, Chapters 13 through 16.
    • Brunnermeier, Markus K., "," Journal of Economic Perspectives 23 (1), Winter 2009, 77-100.
    • Gorton, Gary B., "," European Financial Management, 15 (1), January 2009, 10-46. (For a more detailed examination, read instead Gorton's "," Conference Proceedings from Maintaining Stability in a Changing Financial System, Federal Reserve Bank of Kansas City, 2008.)
    • Goodman, Peter S., and Gretchen Morgenson, "," New York Times, December 28, 2008.
    • Acharya, Viral V., and Matthew Richardson, "," Critical Review 21 (2), June 2009, 195-210.
    • Mishkin, Frederic S., "," Journal of Economic Perspectives 25 (1), Winter 2011, 49-70.
    • Deaton, Angus, "," Cambridge, Mass.: National Bureau of Economic Research, NBER Working Papers, No. 17128, June 2011. (Click "NBER Subscribers Download" to get paper. You must be on the Reed network for access.)
    • Taylor, John B., "," Critical Review 21 (2), 2009, 341-364. (An excellent analysis that places blame on the Fed's lax monetary policy in the early 2000s.)
    • Claessens, Stijn, Ayhan Kose, and Marco E. Terrones, "" Economic Policy 24 (60), October 2009, 653-700.
    • Lane, Philip R., "," London: Centre for Economic Policy Research, CEPR Discussion Papers, No. 8287, March 2011.