Where does panic collide?

A sudden collective loss of confidence in which many people rush at once to withdraw deposits or sell assets, as in a bank run. Bagehot's Lombard Street (1873) described how such episodes spread through a money market and argued that a central bank should lend freely to arrest them, and Kindleberger's Manias, panics, and crashes (1978) traced the pattern across financial history. Diamond and Dybvig (1983) modelled it formally, showing a bank can have two outcomes for the same fundamentals, an orderly one and a run, so the panic is a self-fulfilling coordination failure rather than a mental state. The referent is a market-wide event across many actors, not one person's episode, a plant, or an ancient fright.[1][2][3]

Unit

An episode of collective withdrawal or selling across many actors

Recovery means

A lender of last resort and deposit insurance are the classic mechanisms studied for arresting a panic

Measured by

Tracked by deposit outflows, falling asset prices, and spikes in short-term funding costs

A discrete episode of intense fear that begins abruptly and reaches a peak within minutes, accompanied by bodily symptoms such as a racing heart, shortness of breath, and dizziness. Klein (1964) delineated this reaction as a distinct anxiety syndrome that responded to a different medication than ordinary anxiety, and the category of panic disorder was later formalised in the third edition of the Diagnostic and statistical manual of mental disorders (1980), with criteria carried into the fifth edition (American Psychiatric Association, 2013). The referent is a clinical event in one individual, defined by diagnostic criteria, not a market-wide run, a grass, or a word's ancient origin.[4][5]

Unit

A single episode in one individual, or a diagnosis assigned by criteria

Recovery means

Not applicable

Measured by

Identified by diagnostic criteria, structured clinical interviews, and symptom rating scales