1 Financial Crises and the Subprime Meltdown Chapter 9.
Factors Causing Financial Crises Asset Markets Effects on Balance Sheets –Stock market decline Decreases net worth of corporations. –Unanticipated deflation.
Combating adverse selection and moral hazard: Collateral Net Worth (=$Assets - $Liabilities) Net Worth – The Foundation of Credit.
Chapter 9 Financial Crises. © 2013 Pearson Education, Inc. All rights reserved.9-2 What is a Financial Crisis? A financial crisis occurs when there is.
Financial Crises, Financial Frictions, and Lost Decades The Great Depression, 1929 – 1939 Emerging Market Crises 1980s Third World Debt Crisis 1994-5 Tequila.
Factors Causing Financial Crises
Combating adverse selection and moral hazard :
Financial Crises, Financial Frictions, and Lost Decades
