A Crash Course on Crises Macroeconomic Concepts for Run-Ups, Collapses, and Recoveries

Modern economies frequently experience macro-financial crashes that originate in the financial sector and then spread, causing deep and prolonged recessions. "A Crash Course on Crises" synthesizes recent economic research to identify the precursors, triggers, and consequences of these crashes, offering insights into effective policy responses.

The book presents ten self-contained chapters, each introducing a key economic concept through intuitive explanations and diagrams. These concepts are then applied to two distinct historical examples, ranging from Chile in the 1970s to the COVID-19 pandemic, illustrating how forces like bubbles, systemic risk, and the diabolic loop operate in real-world scenarios. This approach provides a framework for understanding how debt contracts, banks, and the search for safety can amplify economic downturns, and how monetary, fiscal, and exchange-rate policies can prevent crises from becoming persistent. It offers an accessible overview for anyone seeking to understand the dynamics of economic crises.