Three 3️⃣ Branches of Theories of Financial Crises

✅ Three 3️⃣ Branches of Theories of Financial Crises presents 🎁 basic frameworks linked 🔗 to the broad topic of financial crises and ➕ describes some of the directions in which they influenced the literature and ➕ the way they relate to recent events. The authors also address some of the policy challenges, shedding 🌳 light 💡 on them ➡️👥 using the analytical tools 🔪 at hand ✋ so that this survey will help to highlight the basic underlying forces that have been studied in the literature for over three 3️⃣ decades in a simple and ➕ transparent way. It will be an easy and ➕ accessible ♿️ source to the many economists who are interested in exploring the topic of financial crises following recent events.After the Introduction, Section 2️⃣ reviews the literature on banking 🏦 crises and ➕ panics. This literature is perhaps most directly linked 🔗 to the concept of crises. While Section 2️⃣ emphasizes fragility faced 😀 by financial institutions due to coordination failures by their creditors, Section 3️⃣ reviews models that analyze frictions in loans extended by financial institutions and ➕ other lenders. Overall, the models of Sections 2️⃣ and ➕ 3️⃣ highlight fragility on the different sides of the balance 🤹 sheet of a financial institution. Another literature that evolved independently is focused on currency 💵 crises. Traditionally, these were viewed as a separate phenomenon, unrelated to banking 🏦 crises, but more recently the literatures have moved towards each other. Section 4️⃣ reviews models of currency 💵 crises and ➕ Section 5️⃣ provides concluding ...

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