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Financial Markets and Financial Fragility

Edited by Jan Toporowski, Professor of Economics and Finance and Chair, Economics Department, the School of Oriental and African Studies, University of London, UK
These authoritative volumes present the most important published work on the theory and incidence of financial fragility in the financial markets, and policy for dealing with fragility. The volumes cover the recent central bank discussions about financial fragility and models simulating financial fragility. Contents include the key historical contributions that have formed our current understanding of how it arises in the financial markets, the consequences for the economy at large, and for the way in which credit operates in society. These volumes are a key resource for policymakers, central bankers and senior executives in banking and finance who need to extend their understanding of financial fragility and develop instruments for managing such difficulties. Academics specialising in banking and financial economics will find conveniently in two volumes the essential research materials dealing with the pathology of credit markets.
Two volume set
Extent: 1,008 pp
Hardback Price: $525.00 Web: $472.50
Publication Date: 2010
ISBN: 978 1 84844 097 5
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  • Economics and Finance
  • Financial Economics and Regulation
  • Money and Banking
These authoritative volumes present the most important published work on the theory and incidence of financial fragility in the financial markets, and policy for dealing with fragility. The volumes cover the recent central bank discussions about financial fragility and models simulating financial fragility. Contents include the key historical contributions that have formed our current understanding of how it arises in the financial markets, the consequences for the economy at large, and for the way in which credit operates in society. These volumes are a key resource for policymakers, central bankers and senior executives in banking and finance who need to extend their understanding of financial fragility and develop instruments for managing such difficulties. Academics specialising in banking and financial economics will find conveniently in two volumes the essential research materials dealing with the pathology of credit markets.
32 articles, dating from 1873 to 2009
Contributors include: W. Bagehot, B. Bernanke, I. Fisher, J.K. Galbraith, C. Goodhart, J.M. Keynes, C. Kindleberger, H.P. Minsky, F. Mishkin, R. Shiller
Contents:

Volume I

Acknowledgements

Introduction Jan Toporowski

PART I CENTRAL BANKS AND INSTABILITY IN BANKING AND ASSET MARKETS
1. William A. Allen and Geoffrey Wood (2006), ‘Defining and Achieving Financial Stability’
2. Robert M. Solow (1982), ‘On the Lender of Last Resort’
3. Henry C. Simons (1936), ‘Rules versus Authorities in Monetary Policy’

PART II RECENT MODELS
4. Douglas W. Diamond and Philip H. Dybvig (1983), ‘Bank Runs, Deposit Insurance, and Liquidity’
5. Albert M. Wojnilower (1980), ‘The Central Role of Credit Crunches in Recent Financial History’
6. Charles A.E. Goodhart, Pojanart Sunirand and Dimitrios P. Tsocomos (2004), ‘A Model to Analyse Financial Fragility: Applications’
7. Franklin Allen and Douglas Gale (2004), ‘Financial Fragility, Liquidity and Asset Prices’
8. Sushil Bikhchandani, David Hirshliefer and Ivo Welch (1992), ‘A Theory of Fads, Fashion, Custom and Cultural Change as Informational Cascades’
9. Josef Steindl (1990), ‘The Dispersion of Expectations in a Speculative Market’

PART III THE HISTORICAL DISCUSSION
10. Walter Bagehot ([1873] 1931), ‘ Why Lombard Street is Often Very Dull, and Sometimes Extremely Excited’ and ‘A More Exact Account of the Mode in which the Bank of England has Discharged its Duty of Retaining a Good Bank Reserve, and of Administering it Effectually’
11. Thorstein Veblen (1904), ‘The Theory of Modern Welfare’
12. Rosa Luxemburg ([1913] 1951), ‘International Loans’
13. John Maynard Keynes ([1913] 1973), ‘Prologue. How Far are Bankers Responsible for the Alternations of Crisis and Depression?’
14. John Maynard Keynes ([1936] 2007), ‘The State of Long-term Expectation’
15. Irving Fisher (1933), ‘The Debt-Deflation Theory of Great Depressions’
16. R.G. Hawtrey (1962), ‘Foreword to New Edition’


Volume II

Acknowledgements

An introduction by the editor to both volumes appears in Volume I

PART I THE CURRENT FRAMEWORK
1. Frederic S. Mishkin (1991), ‘Asymmetric Information and Financial Crises: A Historical Perspective’
2. Carlos Diaz-Alejandro (1985), ‘Good-Bye Financial Repression, Hello Financial Crash’
3. Asli Demirgüç-Kunt and Enrica Detragiache (1999), ‘Financial Liberalization and Financial Fragility’
4. Barry Eichengreen, Ricardo Hausmann and Ugo Panizza (2007), ‘Currency Mismatches, Debt Intolerance, and Original Sin: Why They are Not the Same and Why it Matters’
5. Charles P. Kindleberger (1996), ‘Conclusion: The Lessons of History’, ‘Appendix A’ and ‘Appendix B’
6. Robert J. Shiller (2001), ‘Speculative Volatility in a Free Society’
7. Jan Kregel (2007),‘The Natural Instability of Financial Markets’, Levy Economics Institute Working Paper, No. 523, December, 1-28 [28]

PART II FINANCIAL FRAGILITY AND THE MACROECONOMY
8. John Kenneth Galbraith ([1954] 1992), ‘Cause and Consequence’
9. Martin H. Wolfson (1994), ‘A Business-Cycle Model of Financial Crises’
10. E.P. Davis (1992), ‘The Economic Theory of Systemic Risk’

PART III MACROECONOMIC THEORIES OF FINANCIAL FRAGILITY
11. Hyman P. Minsky (1982), ‘The Financial-Instability Hypothesis: Capitalist Processes and the Behavior of the Economy’
12. Philip Arestis and Murray Glickman (2002), ‘Financial Crisis in Southeast Asia: Dispelling Illusion the Minskyan Way’
13. Josef Steindl (1989), ‘Saving and Debt’
14. Ben Bernanke and Mark Gertler (1989), ‘Agency Costs, Net Worth, and Business Fluctuations’

PART IV SOCIAL RISKS AND FINANCIAL FRAGILITY
15. Robert J. Shiller (1993), ‘Mechanisms for Hedging Long Streams of Income’, ‘National Income and Labor Income Markets’ and ‘Making It Happen’
16. Jan Toporowski (2009), ‘The Economics and Culture of Financial Dependence’

Name Index