Deciphering the Liquidity and Credit Crunch 2007-2008.

Brunnermeier, M. K. (2009). Deciphering the Liquidity and Credit Crunch 2007-2008. Journal of Economic Perspectives, 23(1), 77-100.

Type

Journal article

Intellectual base

Primary research

Year

2009

Volume

23

Issue

1

Pages

77-100

DOI

10.1257/jep.23.1.77

DOI registrant

American Economic Association

Link

https://doi.org/10.1257/jep.23.1.77

Cited from

systems_cybernetics

Cited by

1 citation across 1 artifact.

Each citation links to the sentence it supports in the citing article.

Primes

• Vulnerability Hotspot
  • In finance, the balance-sheet position where leverage, illiquidity, and correlated counterparty exposure meet in one institution becomes the detonation point of a crisis.

    This sourceLeverage, funding illiquidity, and interconnected exposures compound at concentrated balance-sheet positions, amplifying losses into a systemic crisis — the financial detonation-point hotspot.

    Supported in partVerified against the publisher's abstract

    The abstract frames financial amplification — mortgage losses spreading into liquidity dry-ups and turmoil — but does not state the leverage, illiquidity and concentration mechanism, nor the lifeline or fiber-junction claim.

    “This paper attempts to explain the economic mechanisms that caused losses in the mortgage market to amplify into such large dislocations and turmoil in the financial markets, and describes common economic threads that explain the plethora of market declines, liquidity dry-ups, defaults, and bailouts that occurred after the crisis broke in summer 2007.”

    Read by an automated reader; not a human review. How support was checked

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