Where Danger Lurks

IMF Blog, September 22, 2014

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Where Danger Lurks

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Bibliographic details

• Published: September 22, 2014

Overview

• Article title: "Where Danger Lurks"
• Publication date: September 22, 2014
• Author referenced: Olivier Blanchard, IMF’s chief economist
• Publication outlet: Finance & Development Magazine
• Central topics: small shocks, sudden stops, and liquidity

Substantive findings and themes

• The article examines "dark corners" of the financial crisis—situations in which the economy could badly malfunction.
• Focus on how small shocks can trigger large adverse outcomes through sudden stops and liquidity problems.
• Emphasis that the financial system and the economy were more vulnerable than previously believed.

Key quote (author's assessment)

• “We all knew that there were ‘dark corners’ — situations in which the economy could badly malfunction,” Blanchard said. “The main lesson of the crisis is that we were much closer to those dark corners than we thought — and the corners were even darker than we had thought too."

Source: IMF blog landing page "Where Danger Lurks", September 22, 2014

References

• Olivier Blanchard
• Where Danger Lurks’
• Finance & Development