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Sudden Financial Arrest


  • Ricardo J Caballero


There are striking and terrifying similarities between the sudden failure of a heart and that of a financial system. In the medical literature, the former is referred to as sudden cardiac arrest. By analogy, I refer to its financial counterpart as a sudden financial arrest. In this article I describe the latter and its treatment guided by its medical counterpart.

Suggested Citation

  • Ricardo J Caballero, 2010. "Sudden Financial Arrest," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 58(1), pages 6-36, August.
  • Handle: RePEc:pal:imfecr:v:58:y:2010:i:1:p:6-36

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    References listed on IDEAS

    1. Markus K. Brunnermeier & Yuliy Sannikov, 2014. "A Macroeconomic Model with a Financial Sector," American Economic Review, American Economic Association, vol. 104(2), pages 379-421, February.
    2. Cúrdia, Vasco & Woodford, Michael, 2016. "Credit Frictions and Optimal Monetary Policy," Journal of Monetary Economics, Elsevier, vol. 84(C), pages 30-65.
    3. Bernanke, Ben S & Blinder, Alan S, 1992. "The Federal Funds Rate and the Channels of Monetary Transmission," American Economic Review, American Economic Association, vol. 82(4), pages 901-921, September.
    4. Thomas Laubach & John C. Williams, 2003. "Measuring the Natural Rate of Interest," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1063-1070, November.
    5. Bernanke, Ben & Gertler, Mark, 1989. "Agency Costs, Net Worth, and Business Fluctuations," American Economic Review, American Economic Association, vol. 79(1), pages 14-31, March.
    6. Adrian, Tobias & Estrella, Arturo, 2008. "Monetary tightening cycles and the predictability of economic activity," Economics Letters, Elsevier, vol. 99(2), pages 260-264, May.
    7. Estrella, Arturo & Hardouvelis, Gikas A, 1991. " The Term Structure as a Predictor of Real Economic Activity," Journal of Finance, American Finance Association, vol. 46(2), pages 555-576, June.
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    Cited by:

    1. Piotr Ciżkowicz & Andrzej Rzońca & Rafał Trzeciakowski, 2015. "Windfall of Low Interest Payments and Fiscal Sustainability in the Euro Area: Analysis through Panel Fiscal Reaction Functions," Kyklos, Wiley Blackwell, vol. 68(4), pages 475-510, November.
    2. Rutledge, John, 2015. "Economics as energy framework: Complexity, turbulence, financial crises, and protectionism," Review of Financial Economics, Elsevier, vol. 25(C), pages 10-18.
    3. Benigno, Gianluca & Chen, Huigang & Otrok, Christopher & Rebucci, Alessandro & Young, Eric R., 2013. "Financial crises and macro-prudential policies," Journal of International Economics, Elsevier, vol. 89(2), pages 453-470.
    4. Eric Young & Alessandro Rebucci & Christopher Otrok, 2013. "Capital Controls or Real Exchange Rate Policy? A Pecuniary Externality Perspective," 2013 Meeting Papers 641, Society for Economic Dynamics.
    5. Gianluca Benigno & Huigang Chen & Christopher Otrok & Alessandro Rebucci & Eric R. Young, 2011. "Revisiting Overborrowing and its Policy Implications," Central Banking, Analysis, and Economic Policies Book Series,in: Luis Felipe Céspedes & Roberto Chang & Diego Saravia (ed.), Monetary Policy under Financial Turbulence, edition 1, volume 16, chapter 6, pages 145-184 Central Bank of Chile.
    6. Giovanni Majnoni & Andrew Powell, 2011. "On Endogenous Risk, the Amplification Effects of Financial Systems and Macro Prudential Policies," IDB Publications (Working Papers) 3804, Inter-American Development Bank.
    7. Jan in 't Veld & Werner Roeger, 2012. "Evaluating the Macroeconomic Effects of Government Support Measures to Financial Institutions in the EU," European Economy - Economic Papers 2008 - 2015 453, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    8. Cukierman, Alex & Izhakian, Yehuda, 2015. "Bailout uncertainty in a microfounded general equilibrium model of the financial system," Journal of Banking & Finance, Elsevier, vol. 52(C), pages 160-179.
    9. Hasan Cömert & Gerald Epstein, 2016. "Finansal Yenilik Yazinindaki Son Gelismeler," STPS Working Papers 1604, STPS - Science and Technology Policy Studies Center, Middle East Technical University, revised Jan 2016.

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