An increase in the frequency and intensity of environmental crises associated with accelerating human-induced global change is of substantial concern to policy makers. The potential impacts, especially on the poor, are exacerbated in an increasingly connected world that enables the emergence of crises that are coupled in time and space. We discuss two factors that can interact to contribute to ...

We examine optimal discount window policy in an economy with a linear investment technology and aggregate liquidity shocks. Unrestricted lending at the discount window prevents large shocks from causing banking crises, but leads to indeterminacy of stationary equilibrium. We show how a policy of offering discount-window loans at an above-market interest rate generates a unique stationary moneta...

This paper investigates the implications of major financial markets crises for the human capital accumulation decisions of households. We use data for Argentinean households over the period 1995-2002 to examine households’ response to negative idiosyncratic income shocks in different macroeconomic scenarios. In particular we study how teenagers’ school progress responds to household head unempl...

Since mid-2008, the UK economy has faced an unprecedented series of large adverse shocks that have led companies and households to become more uncertain about future economic prospects. These shocks include one of the United Kingdom’s largest ever financial crises, continuing headwinds from the euro-area debt crisis and the implementation of the Government’s fiscal consolidation programme. The ...

Economists who emphasize path dependence generally dispute, at first approximation, the effectiveness of rational choice in understanding institutions. Such economists, belonging to the original (old) institutional economics and the historical school maintain that the constraint function is riddled with inefficient technologies and institutions which agents fail to replace with superior ones ev...

in the past few decades, capitalist economic system has witnessed different financial crises the most important of which is the 2008 financial crisis. the crisis had different causes that the main causes are innovations and financial assets without actual backing (real underlying asset) and their developing by financial institutions. namely, financial institutions, especially banks, developed t...

background: theoretically, a vital factor in development has been the resilience and strength of socio-economic system to confront instabilities and crises. the precaution, however, is that an error might be committed, where, instead of finding the root causes of diseases we are mobilizing the forces to confront the signs of illness, leaving the diseases to grow and damage the lesser developed ...

This note is motivated by trying to understand the macroeconomic implications of assuming that periods of financial bonanza and turmoil are driven by financial innovation and collapse in line with the “bank run” literature of the Diamond-Dybvig (1983) variety. Bypassing a host of important but, for the present purposes, secondary details the note assumes that the initial effects of financial in...