“No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models
AbstractThis paper presents evidence that accounting (or flow-of-fund) macroeconomic models helped anticipate the credit crisis and economic recession. Equilibrium models ubiquitous in mainstream policy and research did not. This study identifies core differences, traces their intellectual pedigrees, and includes case studies of both types of models. It so provides constructive recommendations on revising methods of financial stability assessment. Overall, the paper is a plea for research into the link between accounting concepts and practices and macro economic outcomes.
Download InfoIf 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.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 15892.
Date of creation: 16 Jun 2009
Date of revision:
credit crisis; recession; prediction; macroeconomics; flow of funds; financialization; neoclassical economics; accounting research;
Find related papers by JEL classification:
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
- E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
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.:
- Giuseppe Fontana & Bill Gerrard, 2002. "The Significance of the Monetary Context of Economic Behavior," Review of Social Economy, Taylor & Francis Journals, vol. 60(2), pages 243-262.
- Steve Keen, 1995. "Finance and Economic Breakdown: Modeling Minsky's "Financial Instability Hypothesis"," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 17(4), pages 607-635, July.
- Giuseppe Fontana, 2000. "Post Keynesians and Circuitists on Money and Uncertainty: An Attempt at Generality," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 23(1), pages 27-48, October.
- Engelbert Stockhammer, 2000.
"Financialization and the Slowdown of Accumulation,"
geewp14, Vienna University of Economics Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
- Baumol, William J, 1977. "Say's (at Least) Eight Laws, or What Say and James Mill May Really Have Meant," Economica, London School of Economics and Political Science, vol. 44(174), pages 145-61, May.
- Jordan, J S, 1989. "The Economics of Accounting Information Systems," American Economic Review, American Economic Association, vol. 79(2), pages 140-45, May.
- Hopwood, Anthony G., 2009. "Exploring the interface between accounting and finance," Accounting, Organizations and Society, Elsevier, vol. 34(5), pages 549-550, July.
- Das Dilip K., 2006. "Globalization in the World of Finance: An Analytical History," Global Economy Journal, De Gruyter, vol. 6(1), pages 1-25, February.
- Wynne Godley & Marc Lavoie, 2007.
"Fiscal Policy in a Stock-Flow Consistent (SFC) Model,"
Economics Working Paper Archive
wp_494, Levy Economics Institute.
- Wynne Goldey & Marc Lavoie, 2007. "Fiscal policy in a stock-flow consistent (SFC) model," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 30(1), pages 79-100, October.
- Dean Baker, 2002. "The Run-up in Home Prices: A Bubble," Challenge, M.E. Sharpe, Inc., vol. 45(6), pages 93-119, November.
- Keen, Steve, 2013. "A monetary Minsky model of the Great Moderation and the Great Recession," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 221-235.
- Lukáš Kovanda, 2011. "The Future of Economics: Four Possible Scenarios," Politická ekonomie, University of Economics, Prague, vol. 2011(6), pages 743-758.
- Martin Janíčko, 2012. "Financial Innovations and Economic Fluctuation from the Present Perspective," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2012(6), pages 18-33.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.