Measuring Wealth and Financial Intermediation and Their Links to the Real Economy
More than half a decade has passed since the bursting of the housing bubble and the collapse of Lehman Brothers. In retrospect, what is remarkable is that these events and their consequences came as such a surprise. What prevented most of the world from recognizing the impending crisis and, looking ahead, what can be done to prevent something similar?
Measuring Wealth and Financial Intermediation and Their Links to the Real Economy identifies measurement problems that made it difficult to spot some of the key trends that preceded the financial crisis, and it outlines improvements in measurement that may help to prevent future crises. In addition to advances in measuring financial activity, the book also investigates the effects of the crisis on households and nonfinancial businesses. Households’ experiences varied greatly, and some even experienced gains in wealth, while nonfinancial businesses’ lack of access to credit in the recession was a key factor contributing to the economic downturn.