Paul Krugman

@paulkrugman ↗

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Last Checked Jan. 13, 2021

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Sat Dec 19 18:49:38 +0000 2020

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Paul Krugman @paulkrugman

I generally think of these crises in terms of the framework Shleifer and Vishny offered in 1997, explaining how it's possible for some assets to become massively underpriced; why don't buyers rush in? 3/ https://t.co/i6LHPgbH9r — PolitiTweet.org

Posted Dec. 19, 2020

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Paul Krugman @paulkrugman

The run arguably began with Mexico's tequila crisis in 1995; then there was the Asian crisis of 1997-8, the horrifying global crisis of 2008, the euro crisis of 2010-12, and a brief but very scary breakdown in March 2020 2/ — PolitiTweet.org

Posted Dec. 19, 2020

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Paul Krugman @paulkrugman

The answer is that the people/institutions who have the knowledge to buy also tend to already own a lot of the assets in question. When prices crash, they're left without cash or the collateral to borrow, so they can't play their usual stabilizing role 4/ — PolitiTweet.org

Posted Dec. 19, 2020