Mishkin

What is the main function of financial markets?

Briefly describe how adverse selection occurs and negatively impacts the financial market.

How does Mishkin define financial instability?

Describe the mechanism that causes deterioration in financial sector balance sheets to lead to financial instability.

Describe how deterioration of nonfinancial balance sheet leads to asymmetric information problems via adverse selection and moral hazard.

What risk do emerging markets face that established markets do not in regards to financial instability?

Why did capital flow to these newly liberalized nations and what problem did it cause?

What can an industrialized nation do to fight financial crisis?

What does Mishkin propose at the international level to help calm crisis and prevent contagion?