The Financial System as an Impediment to Significant Emissions Reductions
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The global financial system displays the same bounded resilience that many complex systems in nature display. Within certain limits the system maintains its integrity but when those limits are broken positive feedback loops can rapidly move the system to a very different state. We refer to such events in the financial markets as "crashes". Given that the financial system is central to the allocation of capital and liquidity, such crashes rapidly impact the "real" economy. This was the case in the 1930's, and a repeat was only averted in 2008 and 2020 through unprecedented measures taken by central banks and governments.
The Financial System as an Impediment to Significant Emissions Reductions
The Financial System as an Impediment to…
The Financial System as an Impediment to Significant Emissions Reductions
The global financial system displays the same bounded resilience that many complex systems in nature display. Within certain limits the system maintains its integrity but when those limits are broken positive feedback loops can rapidly move the system to a very different state. We refer to such events in the financial markets as "crashes". Given that the financial system is central to the allocation of capital and liquidity, such crashes rapidly impact the "real" economy. This was the case in the 1930's, and a repeat was only averted in 2008 and 2020 through unprecedented measures taken by central banks and governments.