Why do financial (and other) crises (sometimes) cause a recession? Because they increase the demand for money and so cause an excess demand for the medium of exchange.
But why do financial crises increase the demand for money? Because the demand for money depends on the synchronisation of payments and receipts of money, and synchronisation is a system property that requires coordination between individuals, and a financial crisis will disrupt that coordination. Creating a new coordination may take time.
I'm just playing with this idea, to see if it can fly.
Imagine seven people in a Wicksellian circle. A buys from B, who buys from C, who buys from D, who buys from E, who buys from F, who buys from G, who buys from A.
Suppose each person goes shopping once a week, same time every week, and buys $1 worth of goods. How much money do they need to hold? That depends on how much they synchronise their spending and receipts of money.
If A goes shopping on Mondays, and B on Tuesdays, and C on Wednesdays, etc., they only need to hold $1 in total. Each person buys one day later than he sells. Each person holds the $1 for one day. On any given day, only one person is holding $1, and the other six are holding no money.
If each person buys six days later than he sells, so A shops on Mondays, B shops on Sundays, and so on, they need to hold $6 in total. Each person holds $1 for six days. On any given day, six people are holding $1, and only one is holding no money.
Those two examples show that if people can synchronise their expenditures and receipts of money, by spending money soon after they get money, they need to hold less money on average.
But synchronisation requires coordination.
Suppose that initially each person in the circle goes shopping two days after getting the money. So A goes shopping on Tuesdays, B goes shopping on Thursdays, and so on. Each person holds $1 for 2 days. On any given day, there are two people each holding $1. They need $2 in total.
Now suppose that A changes his mind, and decides he prefers shopping on Mondays, so he only needs to hold $1 for one day. But if all the other people continue to shop on the same days as before, they still need $2 in total. A holds $1 for one day each week, but B holds $1 for three days.
They all need to change days in order to reduce the total amount of money needed. Otherwise, if one person holds less money, it may simply mean that someone else needs to hold more money.
Now suppose they all shop on Monday. How much money is needed? That depends.
If A shops first, B second, and so on, they only need $1. Each person holds the $1 for just a few minutes, except for A, who holds it for nearly the whole week. But if they shop in the reverse order, with G first, F second, and so on, they need $6. Only A holds $1 for just a few minutes, while everyone else holds $1 for nearly a week.
What that example shows is that very small changes in who shops when, even holding constant the assumption that each person shops once per week, can sextuple the amount of money needed to buy a given nominal quantity of goods. It is important that they all line up and shop in the right order to economise on holding money.
And each individual has an incentive to avoid being at the front of the line. In the above example where they line up in the correct order, everyone except A will be happy with his place in the line. A will have an incentive to go to the back of the line, because A gets his money from G, who shops last, so A wants to shop just after G. But if A moves to the back of the line, that now puts B at the front of the line, holding $1 for nearly the whole week. So B may move to the back of the line, and so on. Presumably it only stops when one of the seven is resigned to being at the front of the line because he doesn't want to shop any later in the week.
MV=PT. But V is a very strange beast. V is not determined only by the number of times per week an individual goes shopping. V is a system property, that depends on when each individual goes shopping. PT=$7 in all of my examples, but even though each individual shops once per week, V can vary between 7 and 7/6, simply depending on who shops when.
Each individual in the group of seven may wish to economise on holding money. And each individual can economise on holding money by synchronising his payments and receipts of money. But they cannot all synchronise their payments and receipts of money unless they coordinate.
Given long enough, with nothing else changing, individuals probably will coordinate to better synchronise their payments and receipts. Each of the seven will wait until just after getting money before spending money. Their collective demand for money will be $1, not $6. But it will take some time for them to line up in the correct order, if each individual chooses his own best place in the line, which changes whenever another individual changes his place in the line.
Anything whatsoever that changes what one individual does will disrupt that whole pattern of who pays whom when. The optimal order in line will change, and it will take some time for individuals to shuffle their places in the line to re-discover that optimal order. We should not be at all surprised if the demand for money increases (velocity falls) in the meantime.