Liquidity and Crises: A Review of Franklin Allen, Elena Carletti, Jan Pieter Krahnen and Marcel Tyrell, 2011

Abstract

Allen, et al.’s (2011) handbook makes a valuable contribution in bringing together a set of formal models of liquidity and crises at a time when press coverage and public discourse in this area do not exactly stand out for their rigor. The seven-hundred-page volume contains twenty-five academic articles on liquidity and crises, predominantly of a theoretical nature. These are reprints of papers published for the most part between 1998 and 2008 in top journals, with an opening chapter that provides an exhaustive summary of the main results and related literature. In this respect, the handbook complements the descriptive crisis literature, such as the narrative approach of Kindleberger’s Manias, Panics and Crashes (1996), or the data-rich analysis of Reinhart and Rogoff’s This Time Is Different (2009).