Asset Prices and the Real Economy

1. Front Matter

   Pages i-xi

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2. Opening Remarks

   • Gordon Pepper

   Pages 1-3

3. Introduction: Asset Prices and the Real Economy

   • Forrest Capie, Geoffrey E. Wood

   Pages 5-17

4. The Great Regime Shift: Asset Markets and Economic Activity in Sweden, 1985–93

   • Lars Jonung, Joakim Stymne

   Pages 19-64

5. Debt-Deflation and Financial Instability: Two Historical Explorations

   • Barry Eichengreen, Richard S Grossman

   Pages 65-105

6. Credit Crunch: A British Perspective

   • Leigh Drake, David T Llewellyn

   Pages 106-168

7. Leverage as a State Variable for Employment, Inventory Accumulation and Fixed Investment

   • Charles W. Calomiris, Athanasios Orphanides, Steven A. Sharpe

   Pages 169-196

8. Debt-Deflation: Theory and Evidence

   • Mervyn King

   Pages 197-241

9. Debt-Deflation in Japan

   • Kagehide Kaku

   Pages 242-275

10. Back Matter

    Pages 277-286

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The recession which many countries experienced in the early 1990s had certain unusual aspects. Most notably, and common to all countries, was the behaviour of asset prices relative to the general price level. In consequence, reasons were sought to explain the special characteristics of the recession and as a result of the behaviour of asset prices attention turned to 'Debt-Deflation Theories' associated in different forms with Keynes and Irving Fisher. The contributors to this volume discuss the significance of debt deflation. Their striking common feature is that, on the evidence presented here, the behaviour of asset prices should not be of great concern to policy makers, or to those attempting to understand economic behaviour. However, residual doubts remain over the Japanese case.

• Deflation
• economy
• employment
• instability
• inventory
• investment
• John Maynard Keynes
• Keynes
• science and technology
• stability
• sweden

• Department of Banking and Finance, City University Business School, London, United Kingdom

  Forrest Capie

• City University, London, United Kingdom

  Geoffrey E Wood

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