Behind the 2008 Capital Market Collapse
AbstractGreed and the unethical behavior of financial institutions obviously played a part in the collapse of the world capital market in 2008. But, this paper argues that the main culprits are the neo-liberal ideology (requiring ever smaller gov-ernments and privatization) and the flawed theories of risk assessment. It also finds that given the fact that market economies are fractal structures, the objective assessment and / or the quantification of risks is not even possible. It concludes with some recommendations as to how to avoid future collapses.
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Bibliographic InfoPaper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI_RP_2008_17.
Length: 14 pages
Date of creation: 26 Oct 2008
Date of revision:
Efficiency and self-correction in market economies; Linear-positive and non-linear modelings; creative destruction of coefficients; determinism and randomness; and risk assessment.;
Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-01 (All new papers)
- NEP-CBE-2008-12-01 (Cognitive & Behavioural Economics)
- NEP-FMK-2008-12-01 (Financial Markets)
- NEP-MAC-2008-12-01 (Macroeconomics)
- NEP-PKE-2008-12-01 (Post Keynesian Economics)
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.:
- Christina D. Romer, 1999.
"Changes in Business Cycles: Evidence and Explanations,"
Journal of Economic Perspectives,
American Economic Association, vol. 13(2), pages 23-44, Spring.
- Christina D. Romer, 1999. "Changes in Business Cycles: Evidence and Explanations," NBER Working Papers 6948, National Bureau of Economic Research, Inc.
- Rothschild, Michael & Stiglitz, Joseph E., 1971. "Increasing risk II: Its economic consequences," Journal of Economic Theory, Elsevier, vol. 3(1), pages 66-84, March.
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