Central bankers should have figured out that the credit crunch is more than just a liquidity dilemma.

At AEI conferences in December 2007 and April 2008, the same five AEI economists had widely divergent views about the direction the economy would take, but all agreed that things would become clearer when more data were available about the scope of market turmoil and the health of the economy....

At a December 2007 AEI conference, five AEI economists had widely divergent views about the direction the economy is likely to take, but they agreed to revisit the issue when there were more data available about the scope of market turmoil and the health of the economy. In the four...

No one seems to know where the current turmoil in the financial markets is going. The continued unfolding of losses in subprime mortgages; the huge writeoffs by Citibank, Merrill Lynch, and other major financial players around the world; and the absence of a market for asset-backed securities are either temporary...

As the world financial system grows more complex, new screening methods must be implemented to avoid crisis.