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This important volume presents key contributions to the study of financial crises from many different areas of economics. The book offers an economic history of financial crises, empirical studies of crises in the modern era, and classic works on the theory of banking crises. It also covers specialized topics, with sections on currency crises and financial contagion. Undergraduate students of money, banking, macroeconomics and financial crises alike will find this collection to be an invaluable overview of a critical area of study

"Financial Crises" published on by Oxford University Press.

"Incorporating a broad range of economic approaches, Understanding Financial Crises explores the merits of various arguments and theories which have been used to explain the causes of financial crises. The book explores eight of these different explanations: under-consumption, debt accumulation, financialization, income inequality, financial fragility, tendency of rate of profit to fall, human behavior and global imbalances. The introduction provides a brief overview of each argument along with a comparison of their relative merits. Each chapter then introduces one of the arguments, explores a historical case, and focuses on the insights that can be gleaned into the global crisis in 2007-2008. The book draws on insights from various schools of thought including post-Keynesian economics, Marxist economics, behavioral economics, neoclassical economics, and more, to provide a pluralist overview of the causes of economic crises in general and the Great Recession in particular. This book marks a significant contribution to the literature on economic and financial crises, political economy and heterodox economics. It is well suited to academicians, practitioners, and financial analysts working within the relevant fields. Ensar Yılmaz is a professor at Yıldız Technical University, Istanbul, Turkey, where he teaches in the Department of Economics. He is the author of several articles in the subjects of macroeconomics, financial regulation, income distribution and game theory."

Our friend and colleague Rüdiger Dornbusch passed away before he was able tocomplete his book based on the Munich Lectures in Economics that he gave inNovember 17, 1998, at the Center for Economic Studies of Ludwig-Maximilians-Universität.The lectures contain a fascinating overview of the mechanics andhistory of international financial crises showing the breadth and ingenuity of thiseminent scholar. The lectures were lively and provocative, full of importantinsights and observations. Interestingly enough, Dornbusch expressed asubstantial mistrust in the actions of political decision makers, supervisoryagencies and central banks in the game that leads to the crisis and even collapse offinancial systems, and he advocated supranational supervisory actions as aremedy. CES has decided to prepare a transcript of the lectures, which are also available inthe Internet as full length-videos. I am grateful to Paul Kremmel for hisassistance.

Why are some financial crises associated with political crises and some are not? Does political instability cause financial fragility or the other way around? What are the implications of political distortions for policy in countries experiencing financial turmoil? This paper studies these and other questions in a formal model of debt, default, and financial crisis. A key assumption is that the default decision is made by a government that has superior information than the public about the social costs of default. Citizens, however, can dismiss the government, and overrule its default decision, at the cost of a political crisis. If there is a divergence between the objectives of the government and its people, political crisis may emerge in equilibrium. For this to be the case, the foreign debt must be large enough, and international reserves low. When this political equilibrium is seen as a part of a larger investment problem, I show that there are equilibria in which crises are only financial, and equilibria in which default and political crises occur. In some cases, both kinds of equilibria coexist and, in this sense, a loss of confidence by foreign lenders can exacerbate the likelihood of a political crisis. If so, international intervention in financial markets may ensure financial and political stability at little cost. Policy analysis is delicate, however, and may require linking financial policies to political outcomes.