3.Deleveraging

Please watch the following video for context:

https://www.youtube.com/watch?v=PD-EWxl_s4o

In the video, Paul Krugman, 2008 Nobel Prize winner in Economics, discusses the role of deleveraging in setting off the financial crisis. Please answer the following questions on deleveraging. You may use any source of information you like to answer the questions but please cite your sources in your answer. a)(3 points) What is deleveraging? b)(5 points) What are the consequences of deleveraging by banks and financial institutions that lend mortgages and other loans? Also, discuss the economy-wide implications of deleveraging by big banks and financial institutions (e.g., financial institutions deemed 'too big to fail'). c)(5 points) How did deleveraging by financial institutions reck havoc in the mortgage market, eventually playing a pivotal role in setting off the financial crisis?