FINANCIAL MARKETS, BUBBLES AND BUSTS: THE SOURCES OF FINANCIAL INSTABILITY
Recent episodes of financial turmoil, and especially the global financial crisis of 2007-2008 and its aftermath, underscore the need to understand better the forces behind asset bubbles and crashes. What are their root causes – investor irrationality, excessive risk-taking, misguided policies? And what explains the magnitude of their effects – including the contagion across assets, investors, and countries? How should policy makers balance the dual risks of the post-crisis world -- growth stagnation, on the one hand, and recurrent asset bubbles and crashes, on the other? This seminar will summarize current thinking on bubbles and crashes, and the policy challenges they pose in a financially-globalized world.
Luis Servén is Senior Advisor and Director of Research on Macroeconomics and Growth at the World Bank. He has published numerous books and journal articles on macro-financial topics. He holds a PhD from the Massachusetts Institute of Technology.
Students will gain an understanding of the root causes of financial bubbles and the forces that drive their occurrence. Students will be able to identify the mechanisms responsible for the large effects of financial booms and busts. Students will learn about policy and regulatory tools to prevent and mitigate bubbles and crashes.
10-oct. 17-oct. 24-oct. 7-nov. 14-nov. 21-nov.