Gary B. Gorton and Guillermo L. Ordoñez: Macroeconomics and financial crises: bound together by information dynamics

Excerpt

This book discusses the importance of understanding financial crises in the context of macroeconomics. It emphasizes that financial crises have significant consequences for both individuals and businesses, often leading to economic collapses, job losses, and housing crises. The text highlights that financial crises are not rare, unique events but occur repeatedly in various economies. The authors argue that macroeconomics should incorporate financial crises as an integral and structural aspect of market economies. They pose several key questions about how macroeconomic models should accommodate and explain credit booms, the role of technology and productivity in crises, and whether economic cycles are influenced by the link between technology and finance. …