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With the right keywords (and author searches) from earlier papers, I actually found some academic output already; this might not be peer-reviewed yet, i.e. preprints: McKibbin and Fernando (2 March 2020) The Global Macroeconomic Impacts of COVID-19: Seven Scenarios examines the impacts of different scenarios on macroeconomic outcomes and financial ...


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Let me add a couple more references. There's a (very) recent working paper, "The Macroeconomics of Epidemics" by Eichenbaum, Rebelo, and Trabant: http://papers.nber.org/papers/w26882.pdf Slightly older, but still extraordinarily recent is "Fiscal Policy during a Pandemic" by Faria-e-Castro: https://mfariacastro.github.io/files/Covid_March2020.pdf There ...


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Yes actually many people bothered to study this link. To be more specific the studies are between debt-to-GDP and economic growth (but recession is defined as negative economic growth - more narrowly by NBER as two consecutive quarters of negative growth). Here is a brief summary of the recent literature: Rogoff-Reinhart (discredited) work: As mentioned in ...


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One issue is that it is an attempt to fact-check a movie. A movie has an incentive to give a simplistic explanation of the crisis. There are probably hundreds of academic papers on the crisis. The reader is free to do an internet search. The most reliable account that I am aware of in the public domain is a the U.S. Federal Government’s report (which clocks ...


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Lack of liquidity depresses the output and can lead to recessions because it forces otherwise healthy firms to go bankrupt and it also undermines the financial infrastructure of an economy. I think good way of understanding the problem is to explore the difference between illiquidity and insolvency. When firms go bust it is often mainly due to one of the ...


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"...if such a...cycle exists..."---i.e. in economic language, whether liquidity and demand are endogenous to each other. Yes, of course they are. Liquidity (or illiquidity) of any asset can be viewed as an equilibrium outcome where agents confirm each other's beliefs---similar to the liquidity/illiquidity of a bank. As such it has a self-fulfilling ...


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One of my favorites in this dimension is "This Time Is Different" by Reinhart and Rogoff. Both are respected scholars. The title already suggests what they aim at. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing ...


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There are a lot of differences between the two crises + how these differences manifest in the stock market. First, on the point of the stock market- it's "kinda" an indicator of the overall economy. However, it's not a perfect metric; really, it reflects the weighted sentiment of those who participate. Furthermore, the stock market is more akin to ...


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My favorite, and this is my main area of expertise, so I've read many, is Gary Gorton's Misunderstanding Financial Crises: Why We Don't See Them Coming. It's focused on the history in the United States, but it's a tight historical summary of crises framed in a unifying theory. Relatedly, the Yale Program on Financial Stability's Resource Library is a great ...


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Liquidity is a vague term, and it is more useful to talk about other factors that are measurable. However, the theory that a lack of liquidity alone causes investors to shy away runs against the reality that investors were very interested in real estate and private equity — both considered “illiquid” — before 2008. Corporate bonds are always somewhat ...


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The country's funding costs are very low in comparison: at an average of 25 per barrel (in comparison: Russia is funding for 45, the fracking, which is mainly carried out in the United States, costs $ 75 per barrel). So the earnings are above average anyway. The USA, which has become a serious competitor, should give up market share. Today the United ...


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Fantastic questions! I might only take 1-2 of them on, though. Paraphrased below. 1. How could a bank fail from just one bad product (MBS), shouldn't they be more diversified? So: substantively, one way this could happens is if you don't have a lot of equity in your business. I.e. you've financed a lot of your business with debt. At the end of 2007, ...


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