The stunning collapse of the thrift industry, the major stock slump of
1987, rising corporate debt, wild fluctuations of currency exchange
rates, and a rash of defaults on developing country debts have revived
fading memories of the Great Depression and fueled fears of an impending
economic crisis. Under what conditions are financial markets vulnerable
to disruption and what economic consequences ensue when these markets
break down?
In this accessible and thought-provoking volume, Benjamin M. Friedman
investigates the origins of financial crisis in domestic capital
markets, Paul Krugman examines the international origins and
transmission of financial and economic crises, and Lawrence H. Summers
explores the transition from financial crisis to economic collapse. In
the introductory essay, Martin Feldstein reviews the major financial
problems of the 1980s and discusses lessons to be learned from this
experience. The book also contains provocative observations by senior
academics and others who have played leading roles in business and
government.