Why does debt-deflation make financial crises worse


Problem

1. Why does debt-deflation make financial crises worse?

2. What is a credit spread? Why do credit spreads rise during financial crises?

3. How did financial innovations in mortgage markets contribute to the 2007-2009 financial crisis?

4. What principal-agent problems resulted from the originate-to-distribute mortgage lending model?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Macroeconomics: Why does debt-deflation make financial crises worse
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