Michael D. Bordo, professor of economics at Rutgers University, will give a talk, “An Historical Perspective on the Quest for Financial Stability and the Monetary Policy Regime.”
This paper surveys the co-evolution of monetary policy and financial stability for a number of countries across four exchange rate regimes from 1880 to the present.
I present historical evidence on the incidence, costs and determinants of financial crises, combined with narratives on some famous financial crises. I then focus on some empirical historical evidence on the relationship between credit booms, asset price booms and serious financial crises.
My exploration suggests that financial crises have many causes, including credit-driven asset price booms, which have become more prevalent in recent decades, but that in general financial crises are very heterogeneous and hard to categorize.
Two key historical examples stand out in the record of serious financial crises that were linked to credit-driven asset price booms and busts: the 1920s and 1930s and the Global Financial Crisis of 2007-2008. The question that arises is whether these two ‘perfect storms’ should be grounds for permanent changes in the monetary and financial environment.
Bordo also is director of the Center for Monetary and Financial History at Rutgers. He has held previous academic positions at the University of South Carolina and Carleton University in Ottawa, Canada. He has been a visiting professor at the University of California Los Angeles, Carnegie Mellon University, Princeton University, Harvard University, and Cambridge University, where he was Pitt Professor of American History and Institutions.
He earned a BA at McGill University, an M.Sc. (Econ) at the London School of Economics, and a PhD at the University of Chicago.
He has published many articles in leading journals and 10 books in monetary economics and monetary history. He is editor of a series of books for Cambridge University Press: Studies in Macroeconomic History.
Sponsored by the Department of Economics Danforth-Lewis Speakers Series.