While the unfolding financial turmoil has involved new elements, more fundamental elements have remained the same. New elements include structured credit, the originate-to-distribute business model and the tri-party repurchase agreement. The recurrence of crises reflects a basic procyclicality...

It is a stylised fact in the fields of economic growth theory and economic history that innovation is the engine of economic growth. Like the technological innovations, innovations in the financial sector are expected to change all aspects of economic activity, bringing about a greater...