Banking crises

Reading: Diamond, D.W., and Dybvig, P.H., 1983, “Bank Runs, Deposit Insurance, and Liquidity”, Journal of Political Economy, 91(3):401-419
Lecture handout: Banking crises*

Textbook Reading: Chapter 7 (Section 7.3; pp. 216-225)

For an example of a Ponzi scheme that focused on single women, before Charles Ponzi had even been born, listen to:

For an inside look at how contagion effects in the tech industry, as well as the (unexamined) role of deposit insurance, see this account of the SVB run:

It’s remarkable how that period seemed to pass without a major escalation. Compared to the global financial crisis,  the scale of individual bank failures was massive.

Learning Objectives: Understand the origins of money. Understand seminal models of bank runs. 

Cutting edge theory: Making assessments of digital and crypto currencies.