The brookings panel on economic activity held its eighty-sixth conference in Washington, D.C., on September 11 and 12, 2008. Several of the conference papers examine aspects of the current financial crisis: the relationships among recent global financial imbalances, mortgage lending, and volatile commodity prices; the errors made by lenders in judging subprime mortgages and instruments derived from them to have fairly low credit risk; the effect of mortgage foreclosures on the dynamics of home prices; the impact of mortgage credit losses on the supply of credit; and the implications for financial regulation of spillovers from failing financial institutions. The remaining papers deal with the role of the unofficial economy in economic development, and the effect of an undervalued currency on economic growth in developing countries. This issue of the Brookings Papers on Economic Activity presents the seven papers from the conference, comments by the formal discussants, and synopses of the discussions of the papers by conference participants.
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