Sudden financial arrest
By: [by] Ricardo J. Caballero
Contributors: Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 09-29; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 09-29.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Number of pages: 47
Description: There are striking and terrifying similarities between the sudden failure of a heart and that of a financial system. In the medical literature, the former is referred to as a sudden cardiac arrest (SCA). By analogy, I refer to its financial counterpart as a sudden financial arrest (SFA). In this article I describe SFA and its treatment guided by its medical counterpart. Keywords: Financial crisis, panic, defibrillation, complexity, Knightian uncertainty, moral hazard, financial network, capital requirements, contingent capital, contingent insurance, IMF. JEL Classifications: E32, E44, E58, F30, G01, G20.
Notes: "November 8, 2009."

Includes bibliographical references (p. 40-47).

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