There was recently a superb story in WSJ about Bernanke’s Bubbles Lab. On reading the article I came across work of Prof Marcus Brunnermeier (of Princeton University) and decided to take a look at it.
Prof Brunnermeier is an expert in financial bubbles (which is of course) and much of his research centres on how bubbles take shape and what can we do about it. He has provided a very neat summary of his work.
His researchon sub-prime crisis is a must read for all those interested in the development. Unlike previous research by Rogoff et al and Michael Bordo (covered here) which says no crisis is different and looks at broad economic indicators of crisis, Prof Brunnermeier instead looks at various financial variables to explain the crisis- liquidity, financial indices and moreover how financial firms actually work.
Highly recommended!
PS. Infact all his papers are worth a read.
