Macroeconomic and Policy Challenges Following Financial Meltdowns

Conference hosted by the International Monetary Fund
Date: Friday, April 3, 2009
Time: 9:00 am - 5:00 pm
Venue: IMF Atrium HQ1-RD-710, Washington DC

The conference will discuss how we can prevent acute and prolonged recessions after financial meltdowns and facilitate quick recovery. It will draw lessons from research on economic activities after financial meltdowns, based on both theoretical and empirical case studies. Those would include the current crisis, the Great Depression, Japan's lost decade, Asian crisis, and Latin American crisis. Specifically, leading academic, central bank, and IMF researchers will present and discuss key theoretical models and applied empirical studies, which may include technical but rigorous analysis. The conference will conclude with a panel discussion (4:00 pm -) on policies for recovery. The conference is intended for policymakers and academics. To attend the conference, please contact Helen Hwang ( by Wednesday, April 1, 2009.

This website contains papers and web links to papers that were presented at the conference. The views expressed in these papers are those of the authors only, and the presence of them, or of links to them, on the IMF website does not imply that the IMF, its Executive Board, or its management endorses or shares the views expressed in the papers.


April 3, 2009
Session I: Booms and Busts in Asset Prices and Macroeconomic Consequences
Chair: Nicolas Eyzaguirre (Director of the Western Hemisphere Department, IMF)
9:00 a.m. Winners and Losers in Housing Markets
Nobuhiro Kiyotaki (Princeton University), Alexander Michaelides (London School of Economics), and Kalin Nikolov (Bank of England and London School of Economics)
Discussant: Adriano Rampini (Duke University)
Learning about Risk and Return: A Simple Model of Bubbles and Crashes
George Evans (University of Oregon) and William Branch (University of California Irvine)
Discussant: Noah Williams (University of Wisconsin)
10:30 a.m. Coffee Break
Session II: Lessons from The Great Depression
Chair: Leslie J. Lipschitz (Director of the IMF Institute, IMF)
10:45 a.m. Was the New Deal Contractionary?
Gauti Eggertsson (Federal Reserve Bank of New York)
Discussant: Michael Kumhof (IMF)
The International Great Depression: Deflation, Productivity, and Stock Market
Harold L. Cole (University of Pennsylvania), Lee Ohanian (University of California Los Angeles), and Ron Leung (University of Rochester)
Discussant: Romain Ranciere (IMF)
12:30 p.m. Luncheon – Private Dining Room (by invitation only)
Session III: Policies Following Financial Meltdowns
Chair: Christopher M. Towe (Acting Director of the Monetary and Capital Market Department, IMF)
2:15 p.m. Bursting Bubbles: Consequences and Cures
Narayana Kocherlakota (Federal Reserve Bank of Minneapolis)
Discussant: Arvind Krishnamurthy (Northwestern University)
Will the U.S. Bank Recapitalization Succeed? Lessons from Japan
Anil Kashyap (University of Chicago) and Takeo Hoshi (University of California San Diego)
Discussant: Giovanni Dell’Ariccia (IMF)
3:45 p.m. Coffee Break
4:00 pm Panel Session: Policies for Recovery
Chair: Olivier Blanchard (Economic Counsellor and Director of the Research Department, IMF)
  Panelists: Guillermo Calvo (Columbia University), Takatoshi Ito (University of Tokyo), Hyun-Song Shin (Princeton University)