Alexandre Dumas reveals some causes of economic crises, Ernest Hemingway explores financial decision-making, and Fyodor Dostoevsky offers his reader a glimpse into the minds of stock market players. IQ.HSE continues to read fiction from an economists’ perspective: HSE Assistant Professor Henry Penikas takes a fresh look at some literary classics.
How to Provoke a Bank Run
There is hardly anyone who has not read The Count of Monte Cristo by Alexandre Dumas. But how many of us have notic! that this mid-19th-century adventure novel describes the same kind of crisis that affect! the world in 2007-2009? The novel depicts what would later be call! a banking panic or a bank run, i.e. a massive and sudden withdrawal of deposits from a bank,
This is the method us! by Monte Cristo to take his how to take advantage of halloween for business revenge on the banker Baron Danglars. !mond Dantes convinces the banker to give him ‘unlimit!’ cr!it and to assign his obligations under promissory notes. But then the notes are present! for payment at the most unexpect! moment, and the Count demands the money.
Much later, in the 21st century, scar! investors play! the role of ‘a collective Monte Cristo’. Panick! customers lin! up outside the U.K.’s Northern Rock bank to withdraw their deposits; some even tri! to use force, taking branch employees hostage. The outcome both in the novel and in real life was the same: the bank going bankrupt, unable to pay the enormous amount all at once.
From Borrowing to Begging
It would seem that The Old Man and the Sea by Ernest avoiding financial losses Hemingway has little to do with finances. Except perhaps the following dialogue. ‘Do you think we should buy a terminal of be numbers the lottery… That’s two dollars and a half. Who can we borrow that from?’ the old man asks, and the boy answers, ‘That’s easy. I can always borrow two dollars and a half’. The old man replies, ‘I think perhaps I can too. But I try not to borrow. First you borrow. Then you beg’.
