TY  - JOUR
AU  - Goldstein,Itay
AU  - Razin,Assaf
TI  - Review of Theories of Financial Crises
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18670
PY  - 2013
Y2  - January 2013
UR  - http://www.nber.org/papers/w18670
L1  - http://www.nber.org/papers/w18670.pdf
N1  - Author contact info:
Itay Goldstein
Wharton School
University of Pennsylvania
Philadelphia, PA  19104
E-Mail: itayg@wharton.upenn.edu

Assaf Razin
Department of Economics
Cornell University
Uris 422
Ithaca, NY 14853
Tel: 607/255-9625
Fax: 607/255-2818
E-Mail: ar256@cornell.edu
AB  - In this paper, we review three branches of theoretical literature on financial crises. The first one deals with banking crises originating from coordination failures among bank creditors. The second one deals with frictions in credit and interbank markets due to problems of moral hazard and adverse selection. The third one deals with currency crises. We discuss the evolutions of these branches of the literature and how they have been integrated recently to explain the turmoil in the world economy. We discuss the relation of the models to the empirical evidence and their ability to guide policies to avoid or mitigate future crises.
ER  -