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  4. Financial Crises in History

Financial Crises in History

Objectives

The course studies financial crises in a long-term perspective and in different guises: banking, sovereign debt, exchange rate or inflation crises. Its first objective is to examine the factors explaining the outbreak of financial crises, exploring their incidence, transmission, duration and consequences. Common patterns are recognized, tracing a genealogy to the present financial crisis. The second objective explores the policy and institutional responses to crises, surveying the creation and evolution of the lender of last resort, the role of international institutions and cooperation on rescues, or the changing importance of state bailouts.

This course allows a more intelligent understanding of financial systems, of the challenges and potential dangers that excessive debt may foster, as well as constituting a necessary step to any reflection on ways of preventing or overcoming different types of crises.

General characterization

Code

2169

Credits

3.5

Responsible teacher

José Álvaro Ferreira da Silva

Hours

Weekly - Available soon

Total - Available soon

Teaching language

English

Prerequisites

Available soon

Bibliography

Recommended readings will be presented in each session. Two readings stand out, providing a general outlook on financial crises over time.

Kindleberger, Charles P. (1978). Manias, Panics, and Crashes: A History of Financial Crises. New York: Basic Books.

Reinhardt, Carmen and Kenneth S. Rogoff (2009). This Time Is Different. Eight Centuries of Financial Folly. Princeton (NJ): Princeton University Press.

Resources

Moodle web page with every material for the course (readings, case studies, films and videos, debate blog, Q&As).

Teaching method

The course will be based on lectures, workshop classes, compulsory reading materials, tutorial work with the students, in-class and on-line debates, and written assignments. These delivery methods try to develop the different learning outcomes, combining lectures with structured learning, individual compulsory reading and individual or group tutorial support, autonomous
 
work with team work. Detailed coursework, readings and assignments are available in the Moodle platform.

Evaluation method

•    Team work (35%)
•    Participation in class discussions and on line Forum (15%)
•    Exam (50%) - In order to pass you should have at least 9.0 in the final exam.

    Subject matter

    1.    Introduction
    2.    The global economy: a long-term view
    3.    A tale of two bubbles. Financial crises before the nineteenth century
    4.    The first global economy and its financial crises
    5.    War and crises: currency and inflation crises in the aftermath of WWI
     
    6.    The 1929 crash and the Great Depression in the USA
    7.    The Central European banking crises in the 1930s
    8.    After Bretton Woods: the Great Moderation
    9.    Financial crises in the second global economy
    10.    The Great Recession (2007-2008) - Born in the USA
    11.    The euro crisis
    12.    Lessons from history?