The Social Costs of Financial Crises

This paper studies the impact of financial crises on society. Using data on 187 banking crises in 126 countries over the period 1970-2009, I examine the impact of a crisis not only on the economy and the financial sector, but also on health, education, poverty, and gender issues. A wider-angle lens exposes broad-ranging implications for society. For example, in the six years following a crisis, average life expectancy declines by nine months, primary school enrolment drops by 3.5%, and fertility falls by 5.5% (but adolescent fertility rises by 4.5%). I also find a considerable short-run worsening of poverty and income equality, and a lasting 50% increase in outbound refugees and inbound foreign aid. Although output and employment suffer at least as much for developed countries, the social costs of financial crises are much greater for less-developed countries.

That is from a new paper by Van Dijk (June 2013). 

Trade Books that Warned of the 2008 Real Estate and Financial Meltdown

The list is here. 

A quote from the paper:

Political science is not very good at predicting the future – but once an event takes place we can explain why it was inevitable.  Sydney Verba.

In case you are writing an economics textbook

Some advice from Poul Thois Madsen on how to address the financial crisis:

• Reorganize the existing presentation in order to make the financial crisis fit better into the general presentation. 

• Try to handle the financial crisis theoretically, either by applying already existing concepts and theories, developing existing concepts and theories, or by introducing new concepts and theories.

• Discuss the underlying theoretical reasons as to why economists disagree on possible causes of, remedies for and economic and theoretical consequences of the financial crisis.

• Analyze the financial crisis in the light of previous financial crises. 

• Devote at least an entire chapter to financial crises and link it explicitly to the chapters before and after. 

• Apply the existing conceptual framework when presenting and analyzing the general changes in monetary and fiscal policy (what is being attempted by applying these policies and what are the effects to be expected?). 

• Discuss possible long-term effects of the financial crisis including a discussion on possible ways out of the crisis.

Source.