NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Haircuts

Gary B. Gorton, Andrew Metrick

NBER Working Paper No. 15273
Issued in August 2009
NBER Program(s):   AP   CF   EFG   ME

When "confidence" is lost, "liquidity dries up." We investigate the meaning of "confidence" and "liquidity" in the context of the current financial crisis. The financial crisis is a manifestation of an age-old problem with private money creation, banking panics. We explain this and provide some evidence with respect to the current crisis.

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Document Object Identifier (DOI): 10.3386/w15273

Published: Gary Gorton & Andrew Metrick, 2010. "Haircuts," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 507-520.

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