Den Haan, Wouter J. 
ORCID: 0000-0001-6214-8156 and Sterk, Vincent
(2010)
The myth of financial innovation and the great moderation.
The Economic Journal, 121 (553).
pp. 707-739.
ISSN 0013-0133
Abstract
Financial innovation is widely believed to be at least partly responsible for the recent financial crisis. At the same time, there are empirical and theoretical arguments that support the view that changes in financial markets, in particular, innovations in consumer credit and home mortgages, played a role in the ‘great moderation’. This article questions empirical evidence supporting this view. Especially the behaviour of aggregate home mortgages changed less during the great moderation than is typically believed. A remarkable change we do find is that monetary tightenings became episodes during which financial institutions other than banks increased their mortgages holdings.
| Item Type: | Article |
|---|---|
| Official URL: | http://onlinelibrary.wiley.com/journal/10.1111/%28... |
| Additional Information: | © 2010 The Authors; The Royal Economic Society |
| Divisions: | Economics |
| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HG Finance |
| JEL classification: | G - Financial Economics > G0 - General > G00 - General |
| Date Deposited: | 14 Feb 2012 10:49 |
| Last Modified: | 11 Dec 2024 23:48 |
| URI: | http://eprints.lse.ac.uk/id/eprint/41885 |
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