ECON 252: Financial Markets
Lecture 25 - Learning from and Responding to Financial Crisis I (Lawrence Summers). Professor Summers, former U. S. Treasury Secretary and former President of Harvard University, in this the first of two lectures in honor of former Yale Professor and Council of Economic Advisors chairman Arthur Okun, offers thoughts on the role of monetary policy in economic fluctuations, past and present. In the "Okun period," ending about when Okun died in 1980, the monetary authorities were very much involved in actually creating economic contractions. Inflation would repeatedly get out of control, the Fed would hit the brakes, and the economy would slow. But, that is not the story of the economic cycles of the last two decades. Recent economic cycles appear to be connected with factors endogenous to the financial system, such as bubbles or cycles of complacency among lending institutions. Summers argues that to understand the financial markets and the economy, we must consider models of multiple equilibria, such as bank run models, where a change in confidence may shift the economy drastically without any change in fundamentals. (from oyc.yale.edu)
| Lecture 25 - Learning from and Responding to Financial Crisis I (Lawrence Summers) |
| Time | Lecture Chapters |
| [00:00:00] | 1. A Profile of Lawrence Summers, Memories of Art Okun |
| [00:12:48] | 2. Okun's Concerns on Stable Growth, Inflation, and Cyclical Fluctuations |
| [00:29:05] | 3. The Interconnectedness of Modern Financial Crises Worldwide |
| [00:40:05] | 4. The Bank Run Metaphor in Non-Bank Financial Crises |
| [00:58:38] | 5. Behavioral Finance: Reasons for Positive Feedback |
| [01:15:37] | 6. Summary and Questions on Government Interventions and Moral Hazard |
| References |
| Lecture 25 - Learning from and Responding to Financial Crisis I (Lawrence Summers) Instructor: Professor Robert J. Shiller. Transcript [html]. Audio [mp3]. Download Video [mov]. |
Go to the Course Home or watch other lectures: