The Roots of the Financial Collapse: Going Way, Way Back
AbstractThe paper is based on a talk given in April 2010. It traces the roots of the recent financial crisis from development of the limited liability corporation, to separation of ownership from control, tax incentives for debt financing, investment bankers moving to the corporate form, government backstopping the lenders, and the failure of the quants. Finally, it considers the Minsky hypothesis, under which financial markets are inherently unstable.
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Bibliographic InfoPaper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 760.
Date of creation: 25 Sep 2010
Date of revision:
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financial crises; limited liability; leverage; incentives; investment banking; corporate taxation; quants; Minsky hypothesis.;
Find related papers by JEL classification:
- G01 - Financial Economics - - General - - - Financial Crises
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
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