14.71 | Fall 2009 | Undergraduate

Economic History of Financial Crises


A list of topics by session is given in the calendar below.

Course Meeting Times

Lectures: 2 sessions / week, 1.5 hours / session


This course gives a historical perspective on financial panics. Topics include the growth of the industrial world, the Great Depression and surrounding events, and more recent topics such as the first oil crisis, Japanese stagnation, and conditions following the financial crisis of 2008.

If you want to keep up with financial developments as they happen, take 14.05 Intermediate Applied Microeconomics or read Paul Krugman in The New York Times.


The prerequisites for this course are 14.01 Principles of Microeconomics and 14.02 Principles of Macroeconomics.


We will read most to all of these books:

Koo, Richard C. The Holy Grail of Macroeconomics: Lessons from Japan’s Great Recession. Rev. ed. New York, NY: Norton, 2009. ISBN: 9780470824948.

Morris, Charles R. The Two Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash. New York, NY: Public Affairs, 2009. ISBN: 9781586486914.

Taylor, John B. Getting off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis. Stanford, CA: Hoover Institution Press, 2009. ISBN: 9780817949716.

Buy at MIT Press Temin, Peter. Lessons from the Great Depression. Cambridge, MA: MIT Press, 1991. ISBN: 9780262700443.

Selected chapters will be chosen from these books:

Bartels, Larry M. Unequal Democracy: The Political Economy of the New Gilded Age. Princeton, NJ: Princeton University Press, 2008. ISBN: 9780691136639.

Crafts, Nicholas, and Gianni Toniolo. Economic Growth in Europe since 1945. New York, NY: Cambridge University Press, 1996. ISBN: 9780521499644.

Goldin, Claudia, and Lawrence F. Katz. The Race between Education and Technology. Cambridge, MA: Harvard University Press, 2008. ISBN: 9780674028678.

Kindleberger, Charles P., and Jean-Pierre Laffargue. Financial Crises: Theory, History, and Policy. New York, NY: Cambridge University Press, 1982. ISBN: 9780521243803.

Course Requirements

You will be expected to complete three problem sets, to read the required material before class, and to participate actively in class discussion.


Problem set 1 30%
Problem set 2 30%
Problem set 3 40%


Part I: Growth, wars, and the great depression
1 Introduction  
2-3 Crises and industrialization  
4-5 Early modern crises  
6-7 World War I and depression  
8-9 Recovery and World War II Problem set 1 due in Ses #9
Part II: Post-war stability and crises
10-11 The Golden Age  
12-13 Income inequality  
14-15 Oil crises of the 1970s  
16-17 Japanese growth and stagnation Problem set 2 due in Ses #17
Part III: Recent crises
18-19 Small crises and imbalance  
20-21 2008  
22-23 2009 Problem set 3 due in Ses #23

Course Info

As Taught In
Fall 2009
Learning Resource Types
Problem Sets
Written Assignments