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Economic History

023 Financial Crises, Causes and Cures

【Prerequisites】

High school students who are interested in doing research in the areas of economics, history, finance, political science, or sociology. No specific skills needed, beyond a basic working knowledge of spreadsheets. (e.g. Google Sheets / Excel), basic algebra

【Description】

Financial crises have plagued the world’s economies for almost eight hundred years. Why do these crises happen? Can national governments prevent financial crises and the havoc they wreck on citizens’ wellbeing? Which financial regulations are most likely to prevent crises? And what negative effects might these regulations have on the economy overall? . In the course, students will examine particular crises to see what general principles regarding their causes, and what – if anything – can be done to stop them. Along the way students will learn basic financial theory of institutions (e.g. investment banks and asset management companies), financial instruments (e.g., debt, equity, and mortgage-backed securities) and financial markets (e.g., stock markets, private debt markets). The workshop probes how society’s view of the financial sector has been shaped by the effects of recurring crises throughout history.
 

【Sample research topics】

  • Was the early 1600s Tulip Mania in the Netherlands really widespread?

  • Which buyers bought homes during the early 2000s housing bubble in the United States?

  • Would earlier passage of the Bubble Schemes Act of 1740 have prevented the South Sea Bubble in Great Britain?

  • Did the United States Federal Government cause the 1980s Savings and Loan Crisis?

  • Why didn’t the 1990s tech bubble cause a deep recession?

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