Publications

Working Paper No. 593 | May 2010

A Contribution to the Theory of Financial Fragility and Crisis

The paper examines three aspects of a financial crisis of domestic origin. The first section studies the evolution of a debt-financed consumption boom supported by rising asset prices, leading to a credit crunch and fluctuations in the real economy, and, ultimately, to debt deflation. The next section extends the analysis to trace gradual evolution toward Ponzi finance and its consequences. The final section explains the link between the financial and the real sector of the economy, pointing to an inherent liquidity problem. The paper concludes with comments on the interactions between the three aspects.

Publication Highlight

Working Paper No. 1056
Federal Tax Transfers and Demographic Transition: Balancing Equity and Efficiency
Author(s): Lekha S. Chakraborty, Yadawendra Singh
October 2024

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