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Asymmetric Information and Financial Crises: A Historical Perspective

In: Financial Markets and Financial Crises

  • Frederic S. Mishkin

This paper examines the nature of financial crises from a historical perspective using the new and burgeoning literature on asymmetric information and financial structure. After describing how this literature helps to understand the nature of financial crises, the paper focuses on a historical examination of a series of financial crises in the United States, beginning with the panic of 1857 and ending with the stock market crash of October 19,1987. The asymmetric information approach explains the patterns in the data and many features of these crises which are otherwise hard to explain. It also suggests why financial crises have had such important consequences for the aggregate economy over the past one hundred and fifty years.

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This chapter was published in:
  • R. Glenn Hubbard, 1991. "Financial Markets and Financial Crises," NBER Books, National Bureau of Economic Research, Inc, number glen91-1, March.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 11483.
    Handle: RePEc:nbr:nberch:11483
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    1. repec:oup:restud:v:51:y:1984:i:3:p:393-414 is not listed on IDEAS
    2. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
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