Financial Innovations and Economic Fluctuation from the Present Perspective
AbstractFinancial innovations should be regarded a s a substantial element in the functioning of modern economies and financial sectors. However, their general impact is to be assessed from the present perspective, essentially depending on their particular behaviour and the role they play in the economy. Most importantly, this text follows both the Post-Keynesian and the Regulation School logic, trying to clarify business cycle volatility with respect to the intensity of innovative activities in the financial sector. The article also discusses some hypothetical causal relationships between the 2007-2008 financial and economic crisis and financial innovation activities, largely accelerated in intensity over the preceding two decades. As it is clearly demonstrated, the "Great Moderation" argument has not been entirely confirmed and a number of mainstream economists have ultimately been forced to adjust their respective approaches towards the functioning of modern economies.
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Bibliographic InfoArticle provided by University of Economics, Prague in its journal Acta Oeconomica Pragensia.
Volume (Year): 2012 (2012)
Issue (Month): 6 ()
Postal: Redakce Acta Oeconomica Pragensia, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- G01 - Financial Economics - - General - - - Financial Crises
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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