The underlying common cause of these crises is an enormous increase in credit availability that flows into asset prices—particularly housing—through the banking sector, which is a deeper driver than any single story (monetary policy, housing policy); Ireland and Spain in the eurozone (no independent monetary policy) and the UK and U.S. (floating rates) all experienced this, undercutting purely monetary-policy explanations.

causalpending

Speaker

Carmen Reinhart

Evidence Quote

the inflow provides a availability of credit which can be funneled and as you rightfully pointed out into productive investment

Source

Carmen Reinhart on Financial Crises 11/23/2009EconTalk
Created: 6/15/2026, 9:20:19 AM

My Notes

Loading notes...