Advanced Search
MyIDEAS: Login to save this article or follow this journal

Understanding financial crisis through accounting models

Contents:

Author Info

  • Bezemer, Dirk J.
Registered author(s):

    Abstract

    This paper presents evidence that accounting (or flow-of-funds) macroeconomic models helped anticipate the credit crisis and economic recession. Equilibrium models ubiquitous in mainstream policy and research did not. This study traces the intellectual pedigrees of the accounting approach as an alternative to neo-classical economics, and the post-war rise and decline of flow-of-funds models in policy use. It includes contemporary case studies of both types of models, and considers why the accounting approach has remained outside mainstream economics. It provides constructive recommendations on revising methods of financial stability assessment and advocates an 'accounting of economics'.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/B6VCK-50X30TM-1/2/4b75fbb76da547bab9a7f5101d4b5212
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Accounting, Organizations and Society.

    Volume (Year): 35 (2010)
    Issue (Month): 7 (October)
    Pages: 676-688

    as in new window
    Handle: RePEc:eee:aosoci:v:35:y:2010:i:7:p:676-688

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/aos

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Moritz Schularick & Alan M. Taylor, 2012. "Credit Booms Gone Bust: Monetary Policy, Leverage Cycles, and Financial Crises, 1870-2008," American Economic Review, American Economic Association, American Economic Association, vol. 102(2), pages 1029-61, April.
    2. Camilo E Tovar, 2008. "DSGE models and central banks," BIS Working Papers, Bank for International Settlements 258, Bank for International Settlements.
    3. Edward P. Lazear, 1999. "Economic Imperialism," NBER Working Papers 7300, National Bureau of Economic Research, Inc.
    4. Jordan, J S, 1989. "The Economics of Accounting Information Systems," American Economic Review, American Economic Association, American Economic Association, vol. 79(2), pages 140-45, May.
    5. Blinder, Alan S & Stiglitz, Joseph E, 1983. "Money, Credit Constraints, and Economic Activity," American Economic Review, American Economic Association, American Economic Association, vol. 73(2), pages 297-302, May.
    6. Godley, Wynne, 1999. "Money and Credit in a Keynesian Model of Income Determination," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 23(4), pages 393-411, July.
    7. Simon Chapple, 1991. "Did Kalecki Get There First? The Race for the General Theory," History of Political Economy, Duke University Press, Duke University Press, vol. 23(2), pages 243-261, Summer.
    8. Luigi L. Pasinetti, 2005. "The Cambridge School of Keynesian Economics," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 29(6), pages 837-848, November.
    9. Claudio E. V. Borio & Philip Lowe, 2004. "Securing sustainable price stability: should credit come back from the wilderness?," BIS Working Papers, Bank for International Settlements 157, Bank for International Settlements.
    10. Arnold, Patricia J., 2009. "Global financial crisis: The challenge to accounting research," Accounting, Organizations and Society, Elsevier, Elsevier, vol. 34(6-7), pages 803-809, August.
    11. Wynne Godley & Marc Lavoie, 2007. "Fiscal Policy in a Stock-Flow Consistent (SFC) Model," Economics Working Paper Archive, Levy Economics Institute wp_494, Levy Economics Institute.
    12. Wynne Godley & Dimitri B. Papadimitriou & Greg Hannsgen & Gennaro Zezza, 2007. "The U.S. Economy: Is There a Way Out of the Woods?," Economics Strategic Analysis Archive, Levy Economics Institute sa_nov_07, Levy Economics Institute.
    13. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, Princeton University Press, edition 1, volume 1, number 8973.
    14. Das Dilip K., 2006. "Globalization in the World of Finance: An Analytical History," Global Economy Journal, De Gruyter, De Gruyter, vol. 6(1), pages 1-25, February.
    15. Keen, Steve, 2010. "Solving the paradox of monetary profits," Economics Discussion Papers, Kiel Institute for the World Economy 2010-2, Kiel Institute for the World Economy.
    16. Claudio E. V. Borio, 2004. "Market distress and vanishing liquidity: anatomy and policy options," BIS Working Papers, Bank for International Settlements 158, Bank for International Settlements.
    17. Engelbert Stockhammer, 2000. "Financialization and the Slowdown of Accumulation," Working Papers, Vienna University of Economics Research Group: Growth and Employment in Europe: Sustainability and Competitiveness geewp14, Vienna University of Economics Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    18. Giuseppe Fontana, 2000. "Post Keynesians and Circuitists on Money and Uncertainty: An Attempt at Generality," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 23(1), pages 27-48, October.
    19. Hopwood, Anthony G., 2009. "Exploring the interface between accounting and finance," Accounting, Organizations and Society, Elsevier, Elsevier, vol. 34(5), pages 549-550, July.
    20. Dean Baker & J. Bradford Delong & Paul R. Krugman, 2005. "Asset Returns and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, Economic Studies Program, The Brookings Institution, vol. 36(1), pages 289-330.
    21. Wynne Godley & Gennaro Zezza, 2006. "Debt And Lending: A Cri De Coeur," Economics Policy Note Archive, Levy Economics Institute 06-4, Levy Economics Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Lengnick, Matthias & Krug, Sebastian & Wohltmann, Hans-Werner, 2012. "Money creation and financial instability: An agent-based credit network approach," Economics Discussion Papers, Kiel Institute for the World Economy 2012-61, Kiel Institute for the World Economy.
    2. Grydaki, Maria & Bezemer, Dirk, 2013. "The role of credit in the Great Moderation: A multivariate GARCH approach," Journal of Banking & Finance, Elsevier, Elsevier, vol. 37(11), pages 4615-4626.
    3. Keen, Steve, 2013. "A monetary Minsky model of the Great Moderation and the Great Recession," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 86(C), pages 221-235.
    4. Tim Jackson & Ben Drake & Peter Victor & Kurt Kratena & Mark Sommer, 2014. "Literature review and model development," WWWforEurope Working Papers series, WWWforEurope 65, WWWforEurope.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:aosoci:v:35:y:2010:i:7:p:676-688. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.