Summary of Learning from History

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Learning from History summary


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In the years before the 2008 financial collapse, stock market volatility was unusually subdued. In this insightful, well-presented report, economists Jon Danielsson, Marcela Valenzuela and Ilknur Zer offer financial professionals and policy makers new research on market volatility and banking crises that is based on more than 200 years of data drawn from countries around the world. The authors’ findings support the counterintuitive idea that long-term stability foreshadows economic shockwaves. getAbstract recommends this authoritative report to investors and policy experts interested in understanding how volatility patterns foster systemic risk.

In this summary, you will learn

  • How patterns of volatility can forecast future financial crises and
  • What accounts for the predictive power of high and low volatility.

About the Authors

Jon Danielsson is a political economist at the London School of Economics, where Marcela Valenzuela is a PhD student in finance. Ilknur Zer is an economist at the Board of Governors of the Federal Reserve System.



Financial crises are infrequent; in fact, the “typical OECD member country suffers a banking crisis every 35 years.” However, these financial implosions can be devastating when they do occur. Policy makers need reliable tools to alleviate financial disasters. To this end, a 2016 Federal Reserve Board...

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