2010数量经济会主题演讲FinancialCrisesxiamen.pdf

Financial Crises: Why They Occur and What to Do about Them E. Maskin Institute for Advanced Study • current financial crisis only latest in long sequence • history of financial crisis in U.S. goes back to 19th century • probably crises will continue in future – each crisis somewhat different from predecessors – even if we fix mortgage loan market in U.S.(where current crisis started), something new will happen – even if anticipated, not all crisis may be preventable • however, can do much better at limiting crises 2 Today’s topics • Why does credit market have repeated crises and other markets do not? • Why does credit market require substantial ex post intervention (and others do not)? • What can be done ex ante to prevent/limit crises? 3 To understand what caused this crisis (and other crises) should first eliminate factors that were not causes • irrationality - on part of bankers - on part of borrowers • panic • greed • lack of ethics • overconsumption in U.S./ oversaving in China • opaqueness of derivatives • bankers’ bonuses • banks too big to fail 4 Why is credit market different? (1) credit lifeblood for rest of economy − if crisis in market for rice, won’t bring down market for automobiles − if credit market doesn’t work, enterprises in all markets will have trouble investing and meeting payrolls (2) small shock to credit market often magnified − if some rice growers fail, won’t cause other growers to fail − if some banks fail, may well cause other banks to go under (3) credit market not sel