Causes of the Financial Crisis: An Assessment using UK Data

Christopher Martin, Costas Milas

Research output: Working paper / PreprintWorking paper

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Abstract

We present empirical evidence that the marked rise in liquidity in 2001-2007 was due to large and persistent current account deficits and loose monetary policy. If this increase in liquidity was a pre-condition for the financial crisis that began in July 2007, we can conclude that loose monetary and the deterioration in current account balances were causes of the financial crisis.
Original languageEnglish
Place of PublicationBath, U. K.
PublisherDepartment of Economics, University of Bath
Publication statusPublished - 2009

Publication series

NameBath Economics Research Working Papers
No.18/09

Keywords

  • liquidity
  • monetary policy
  • financial crisis
  • global imbalances

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