Shleifer, Andrei →

Real Credit Cycles

The financial crisis of 2008 renewed economists’ interest in financial fragility, specifically understanding its origins. This paper shows how market participants’ expectations can be part of standard macroeconomic models and significantly improve their explanatory power.

Older People Are Less Pessimistic about the Health Risks of COVID-19

The pandemic presents a unique opportunity to investigate formation of beliefs about an unprecedented, widespread, and life-threatening event. One finding: COVID-19 makes the prospect of disease and death particularly salient for the young.

Predictable Financial Crises

One central issue in the study of macroeconomic stability is financial crisis predictability. This paper estimates the probability of financial crises as a function of past credit and asset price growth.

Diagnostic Bubbles

The financial crisis of 2007-2008 revived academic interest in price bubbles but many conceptual questions remain open. This paper generates insights into the structure of asset price bubbles by modeling beliefs from fundamental psychological assumptions, and combining this with standard neoclassical mechanisms, such as learning from prices and speculation.