ABSTRACT
This chapter presents an overview of key concepts discussed in the subsequent chapters of this book. The book presents contributions that reflect on the history of financial crises and present financial crisis. It is a clear demonstration of the policy relevance of research in the area of economic and financial history. The credit cycle and easy money are two factors that may, to a significant extent, explain the real estate cycle, an important element of the present financial crisis. Financial innovation clearly played a role, and such innovation is certainly not a new phenomenon. History demonstrates the respective roles of governments and markets in any financial crisis merits close scrutiny. The present crisis exposed serious problems in the ability of governments and in the capabilities of markets to deal with crises. Governments, in part due to financial innovations, were not able to control markets; and markets failed to control governments and allowed sovereign borrowing to increase.
