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The preponderant causes of the USA banking crisis 2007–08

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  • Pol, Eduardo

Abstract

Scientific research on the banking crisis 2007–08 has answered many important questions according to generally accepted methodological standards. However, there remains at least one outstanding question that has not been answered with methodological accuracy: What caused the severe USA banking crisis 2007–08? To address this question the paper uses a counterfactual definition of ‘cause,’ distinguishes between separable and non-separable causes, and employs a well-posed methodology for the causation analysis of singular events. In addition, first causes and preponderant causes are distinguished. The main result of this paper is that the preponderant causes of the banking crisis 2007–08 were securitization and ignorance.

Suggested Citation

  • Pol, Eduardo, 2012. "The preponderant causes of the USA banking crisis 2007–08," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 519-528.
    • Handle: RePEc:eee:soceco:v:41:y:2012:i:5:p:519-528
    DOI: 10.1016/j.socec.2012.04.019
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    References listed on IDEAS

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    Cited by:

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Is the 2007 US Sub-Prime Financial Crisis So Different?: An International Historical Comparison," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(3), pages 291-299.
    2. Zafer ADALI, 2017. "The Properties Of The Shadow Banking In China," Fiscaoeconomia, Tubitak Ulakbim JournalPark (Dergipark), issue 1.
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2008. "Is the 2007 US Sub-prime Financial Crisis So Different? An International Historical Comparison," American Economic Review, American Economic Association, vol. 98(2), pages 339-344, May.
    4. Ousayna Zreik & Wael Louhichi, 2017. "Risk Disclosure and Company Unsystematic, Systematic, and Total Risks," Economics Bulletin, AccessEcon, vol. 37(1), pages 448-467.

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    More about this item

    Keywords

    USA banking crisis 2007–2008; Counterfactual approach; Preponderant causes; Securitization; Ignorance;
    All these keywords.

    JEL classification:

    • B - Schools of Economic Thought and Methodology
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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