Macroeconomics and Financial Crises

Bound Together by Information Dynamics

Gary B. Gorton, Guillermo L. Ordoñez

$62.99

Hardback

Not in-store but you can order this
How long will it take?

Availability Information

We source books from suppliers in Australia and overseas. For books we don't currently have in stock, the time it takes to get them from our suppliers can vary widely - from a few days to a few months - so we check each book with each supplier to determine the expected time it will take to be supplied to us.

We then advise you accordingly. If the time taken to get any book is too long for you, you can let us know and we will cancel or adjust your order, and refund as required.

To find out the anticipated arrival time for specific items prior to ordering, please contact us by phone or email:

Phone +61 2 9264 3111, or 1800 4 BOOKS (1800 4 26657) if outside Sydney:
option 1 Abbey's Bookshop (Crime, History, Science, Kids & more) • info@abbeys.com.au
option 2 Language Book Centre (ESL & Foreign Languages) • language@abbeys.com.au
option 3 Galaxy Bookshop (Sci-fi, Fantasy, Romance, Graphic Novels) • sf@galaxybooks.com.au

QTY:

English

Princeton University Press
01 November 2023

Economic theory & philosophy; Macroeconomics; Finance

How financial crises are inherent features of macroeconomic dynamics.

There are no bigger disruptions in the functioning of economies than financial crises. Yet prior to the crash of 20072008, macroeconomics incorporated financial crises simply as bad shocks, like earthquakes, failing to consider them as an intrinsic phenomenon of the evolution of macroeconomic variables, such as credit, investment, and productivity. Macroeconomics and Financial Crises rethinks how technological change, credit booms, and endogenous information production combine to generate financial crises as inherent and recurrent reactions to macroeconomic dynamics.

Gary Gorton and Guillermo Ordoez identify short-term debt, collateral, and information as common elements that are present in all financial crises. Short-term debt is a critical element for storing value over short periods without fear of loss, but there needs to be collateral backing the debt. Critically, the collateral should be such that no agent wants to produce information about its quality. The debt backed by such collateral is information-insensitive. Gorton and Ordoez argue that, during a credit boom, as more and more firms get loans, the economy reaches a tipping point where information production becomes too tempting, disrupting short-term debt and cutting most firms out of the credit market.

Showing how a financial crisis is an information event triggered by the dynamics of macroeconomic variables, Macroeconomics and Financial Crises provides new perspectives on the intricate relations between macroeconomics and financial crises.

By: Gary B. Gorton, Guillermo L. Ordoñez
Imprint: Princeton University Press
Country of Publication: United States
Dimensions: Height: 254mm, Width: 178mm,
ISBN: 9780691227016
ISBN 10: 0691227012
Pages: 208
Publication Date: 01 November 2023
Audience: College/higher education , Professional and scholarly , Primary , Undergraduate
Format: Hardback
Publisher's Status: Active

Gary B. Gorton is the Frederick Frank Class of 1954 Professor of Finance at the Yale School of Management. His books include Slapped by the Invisible Hand and (with Ellis W. Tallman) Fighting Financial Crises. Guillermo L. Ordoez is professor of economics and finance at the University of Pennsylvania and an editor of the Journal of Economic Theory.