Chapter 12’s title is “The Financial Crisis of 2007 – 2008”. The first subtopic of Chapter 12 is “Financial Crisis” which occurs when “one or more financial markets or intermediaries” stop “functioning or” only function “erratically and inefficiently”. It’s about the history of financial crises and involves two types which are systemic crisis, like the Great Depression, and nonsystemic crisis, like the Savings and Loan Crisis. The second subtopic is “Asset Bubbles”, which is the rapid increase in the value of some assets like bonds, equities, etc. It also talks about the causes like low interest rates, new technology, increases in demand, and leverage. The third is “Financial Panics” which is caused by the bursting of the asset bubble. The
