This book is a survey and critique of the major theories of financial crises. The first edition built a model of crisis from an analysis of postwar financial crises in the US through the mid-1980s. The second edition continues the story from 1985 and covers the stock market crash of 1987, the collapse of the Savings and Loan industry, the severe problems of US commercial banks, and the increasing risks posed by junk bonds. A new chapter analyses the causes of increasing financial instability in the 1980s. The book's extensive charts and tables are fully revised and updated to present the latest evidence. The first edition has gained wide interest as a supplemental text.

chapter 1|4 pages


part I|22 pages

The Business Cycle and Financial Crises

chapter 2|15 pages

Cyclical Theories of Financial Crises

chapter 3|5 pages

Comparison of Cyclical Theories

part II|111 pages

Financial Crises in the Postwar U.S. Economy

chapter 4|9 pages

The Credit Crunch of 1966

chapter 5|9 pages

1970: Penn Central

chapter 6|11 pages

1974: Franklin National

chapter 7|16 pages

The Silver Crisis of 1980

chapter 8|16 pages

The 1982 Crisis

chapter 9|16 pages

The Legacy of 1982

part III|92 pages

Understanding the Postwar Experience

chapter 11|8 pages

A Business-Cycle Model of Financial Crises

chapter 12|41 pages

Evaluating the Business-Cycle Model

chapter 13|20 pages

Noncyclical Theories of Financial Crises

chapter 14|21 pages

The Changing Financial System