Both academics and practitioners have recently discovered resilience as a core topic of interest. Resilience is widely viewed as a potential solution to the challenges posed by crises and disasters. The promise of resilience is an organization or society that absorbs shocks and ‘bounces back’ after a disturbance. While the idea of resilience is increasingly popular, empirical research on resili...

We model a run on a financial market, in which each risk-neutral investor fears having to liquidate shares after a run, but before prices can recover back to fundamental values. To avoid having to possibly liquidate shares at the marginal post-run price—in which case the risk-averse market-making sector will already hold a lot of share inventory and thus be more reluctant to absorb additional s...

We add the Bernanke-Gertler-Gilchrist model to a modi…ed version of the Smets-Wouters model of the US in order to explore the causes of the banking crisis. We test the model against the data on HP-detrended data and reestimate it by indirect inference; the resulting model passes the Wald test on output, in‡ation and interest rates. We then extract the model’s implied residuals on US un…ltered d...

We consider a moral hazard setup wherein leveraged firms have incentives to take on excessive risks and are thus rationed when they attempt to borrow in order to meet liquidity shocks. The rationed firms can optimally pledge cash as collateral to borrow more, but in the process must liquidate some of their assets. Liquidated assets are purchased by non-rationed firms but their borrowing capacit...

In the wake of the global financial crisis much attention has been devoted to the role of complexity of bank linkages in the transmission of shocks. We shed light on this issue using a rich dataset on international syndicated bank lending matched with bank financial information. To study how financial crises spread through the global banking network, we distinguish among channels such as banks'...

abstract financial crises and currency instabilities within developing and emerging economies during the last decade had a tremendous impact on the economic performance and increased vulnerability of economies against domestic and foreign shocks. the timing of capital liberalization is one of the significant debates among other issues related to currency instability, and it would be more conven...

A New World of Citizen Action, Analysis, and Policy Options However, facts and data indicate that the default and crisis were the logical outcome of a massive debt accumulation process which was the direct result of: 1) the negative effects of policy prescriptions by the IMF and the World Bank (WB), enthusiastically implemented by Argentine officials and 2) a series of exogenous shocks which ra...

We distinguish two types of debt crises: those that are the outcome of exogenous shocks (to productivity growth for instance) and those that are endogenously created, either by self-fulfilling panic in financial markets or by the reckless behavior of “Panglossian” borrowers. After Krugman, we characterize as “Panglossian” those borrowers who only focus on their best growth prospects, anticipati...