An incisive overview of the macroeconomics of financial crises—essential reading for students
and policy experts alike With alarming frequency modern economies go through macro-financial
crashes that arise from the financial sector and spread to the broader economy inflicting deep
and prolonged recessions. A Crash Course on Crises brings together the latest cutting-edge
economic research to identify the seeds of these crashes reveal their triggers and
consequences and explain what policymakers can do about them. Each of the book’s ten
self-contained chapters introduces readers to a key economic force and provides case studies
that illustrate how that force was dominant. Markus Brunnermeier and Ricardo Reis show how the
run-up phase of a crisis often occurs in ways that are preventable but that may go unnoticed
and discuss how debt contracts banks and a search for safety can act as triggers and
amplifiers that drive the economy to crash. Brunnermeier and Reis then explain how monetary
fiscal and exchange-rate policies can respond to crises and prevent them from becoming
persistent. With case studies ranging from Chile in the 1970s to the COVID-19 pandemic A
Crash Course on Crises synthesizes a vast literature into ten simple accessible ideas and
illuminates these concepts using novel diagrams and a clear analytical framework.
