The roles of financial asset market failure denial and the economic crisis: Reflections on accounting and financial theories and practices
Throughout the world every economic and socio-economic indicator has deteriorated. The so-called 'real economy' has been deeply contaminated by the most significant global financial crisis for seven decades. The ultimate extent and duration of this rampant degeneration and its longer-term political effects are unpredictable but what caused the crisis? This paper examines a range of suppositions made in theories which deny the possibility of financial asset market failure and identifies ways in which they contributed to the circumstances and actions which created the current crisis.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Andres, Christian & Betzer, André & Goergen, Marc & Renneboog, Luc, 2009. "Dividend policy of German firms: A panel data analysis of partial adjustment models," Journal of Empirical Finance, Elsevier, vol. 16(2), pages 175-187, March.
- Burton G. Malkiel, 2005. "Reflections on the Efficient Market Hypothesis: 30 Years Later," The Financial Review, Eastern Finance Association, vol. 40(1), pages 1-9, 02.
- Wynne Godley & Dimitri B. Papadimitriou & Gennaro Zezza, 2008. "Prospects for the U.S. and the World -- A Crisis That Conventional Remedies Cannot Resolve," Economics Strategic Analysis Archive sa_dec_08, Levy Economics Institute.
- Giannone, Domenico & Lenza, Michele & Reichlin, Lucrezia, 2007.
"Explaining The Great Moderation: It Is Not The Shocks,"
CEPR Discussion Papers
6600, C.E.P.R. Discussion Papers.
- Domenico Giannone & Michele Lenza & Lucrezia Reichlin, 2008. "Explaining The Great Moderation: It Is Not The Shocks," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 621-633, 04-05.
- Domenico Giannone & Michèle Lenza & Lucrezia Reichlin, . "Explaining the great moderation: it is not the shocks," ULB Institutional Repository 2013/6413, ULB -- Universite Libre de Bruxelles.
- Giannone, Domenico & Lenza, Michele & Reichlin, Lucrezia, 2008. "Explaining the Great Moderation: it is not the shocks," Working Paper Series 0865, European Central Bank.
- Guillaume Plantin & Haresh Sapra & Hyun Shin, .
"Marking to Market: Panacea or Pandora’s Box ?,"
GSIA Working Papers
2005-E4, Carnegie Mellon University, Tepper School of Business.
- Sanford J Grossman & Joseph E Stiglitz, 1997.
"On the Impossibility of Informationally Efficient Markets,"
Levine's Working Paper Archive
1908, David K. Levine.
- Grossman, Sanford J & Stiglitz, Joseph E, 1980. "On the Impossibility of Informationally Efficient Markets," American Economic Review, American Economic Association, vol. 70(3), pages 393-408, June.
- Keim, Donald B & Stambaugh, Robert F, 1984. " A Further Investigation of the Weekend Effect in Stock Returns," Journal of Finance, American Finance Association, vol. 39(3), pages 819-35, July.
- Patrick Bolton & Jose A. Scheinkman & Wei Xiong, 2003.
"Executive Compensation and Short-termist Behavior in Speculative Markets,"
Levine's Working Paper Archive
506439000000000124, David K. Levine.
- Patrick Bolton & José Scheinkman & Wei Xiong, 2006. "Executive Compensation and Short-Termist Behaviour in Speculative Markets," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 577-610.
- Patrick Bolton & Jose Scheinkman & Wei Xiong, 2003. "Executive Compensation and Short-termist Behavior in Speculative Markets," NBER Working Papers 9722, National Bureau of Economic Research, Inc.
- Caspar Rose & Carsten Mejer, 2003. "The Danish Corporate Governance System: from stakeholder orientation towards shareholder value," Corporate Governance: An International Review, Wiley Blackwell, vol. 11(4), pages 335-344, October.
- Robert F. Bruner & Sean D. Carr, 2007. "Lessons from the Financial Crisis of 1907," Journal of Applied Corporate Finance, Morgan Stanley, vol. 19(4), pages 115-124.
- Geroski,Paul A. & Gregg,Paul, 1997.
"Coping with Recession,"
Cambridge University Press, number 9780521626019, November.
- McSweeney, Brendan, 2000. "Looking forward to the past," Accounting, Organizations and Society, Elsevier, vol. 25(8), pages 767-786, November.
- Bryan, Stephen & Hwang, LeeSeok & Lilien, Steven, 2000. "CEO Stock-Based Compensation: An Empirical Analysis of Incentive-Intensity, Relative Mix, and Economic Determinants," The Journal of Business, University of Chicago Press, vol. 73(4), pages 661-93, October.
- Andrew S. Hilton & Patricia C. O'Brien, 2009. "Inco Ltd.: Market Value, Fair Value, and Management Discretion," Journal of Accounting Research, Wiley Blackwell, vol. 47(1), pages 179-211, 03.
- Simeon Djankov & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2005.
"The Law and Economics of Self-Dealing,"
NBER Working Papers
11883, National Bureau of Economic Research, Inc.
- Allen, Beth E, 1981. "Generic Existence of Completely Revealing Equilibria for Economies with Uncertainty when Prices Convey Information," Econometrica, Econometric Society, vol. 49(5), pages 1173-99, September.
- Kothari, S. P., 2001. "Capital markets research in accounting," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 105-231, September.
- Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-54, May-June.
- Ezzamel, Mahmoud & Willmott, Hugh & Worthington, Frank, 2008. "Manufacturing shareholder value: The role of accounting in organizational transformation," Accounting, Organizations and Society, Elsevier, vol. 33(2-3), pages 107-140.
- Yoon-Jae Whang & Young-Hyun Cho & Oliver Linton, 2006.
"Are there Monday effects in Stock Returns: A Stochastic Dominance Approach,"
FMG Discussion Papers
dp568, Financial Markets Group.
- Cho, Young-Hyun & Linton, Oliver & Whang, Yoon-Jae, 2007. "Are there Monday effects in stock returns: A stochastic dominance approach," Journal of Empirical Finance, Elsevier, vol. 14(5), pages 736-755, December.
- Young-Hyun Cho & Oliver Linton & Yoon-Jae Whang, 2006. "Are there Monday effects in stock returns: a stochastic dominance approach," LSE Research Online Documents on Economics 24520, London School of Economics and Political Science, LSE Library.
- Shleifer, Andrei & Vishny, Robert W, 1997.
" A Survey of Corporate Governance,"
Journal of Finance,
American Finance Association, vol. 52(2), pages 737-83, June.
- Andrei Shleifer & Robert W. Vishny, 1996. "A Survey of Corporate Governance," NBER Working Papers 5554, National Bureau of Economic Research, Inc.
- Andrei Shleifer & Robert W. Vishny, 1995. "A Survey of Corporate Governance," Harvard Institute of Economic Research Working Papers 1741, Harvard - Institute of Economic Research.
- French, Kenneth R., 1980. "Stock returns and the weekend effect," Journal of Financial Economics, Elsevier, vol. 8(1), pages 55-69, March.
- Wang, Ko & Li, Yuming & Erickson, John, 1997. " A New Look at the Monday Effect," Journal of Finance, American Finance Association, vol. 52(5), pages 2171-86, December.
- Sean D. Campbell, 2005. "Stock market volatility and the Great Moderation," Finance and Economics Discussion Series 2005-47, Board of Governors of the Federal Reserve System (U.S.).
- Graham, John R. & Harvey, Campbell R. & Rajgopal, Shiva, 2005.
"The economic implications of corporate financial reporting,"
Journal of Accounting and Economics,
Elsevier, vol. 40(1-3), pages 3-73, December.
- John R. Graham & Campbell R. Harvey & Shiva Rajgopal, 2004. "The Economic Implications of Corporate Financial Reporting," NBER Working Papers 10550, National Bureau of Economic Research, Inc.
- Barron, John M. & Waddell, Glen R., 2003. "Executive rank, pay and project selection," Journal of Financial Economics, Elsevier, vol. 67(2), pages 305-349, February.
- Corbett, Jenny & Jenkinson, Tim, 1997. "How Is Investment Financed? A Study of Germany, Japan, the United Kingdom and the United States," The Manchester School of Economic & Social Studies, University of Manchester, vol. 65(0), pages 69-93, Supplemen.
- Yermack, David, 1995. "Do corporations award CEO stock options effectively?," Journal of Financial Economics, Elsevier, vol. 39(2-3), pages 237-269.
- Jon A. Garfinkel & Jonathan Sokobin, 2006. "Volume, Opinion Divergence, and Returns: A Study of Post-Earnings Announcement Drift," Journal of Accounting Research, Wiley Blackwell, vol. 44(1), pages 85-112, 03.
- repec:nsr:niesrd:313 is not listed on IDEAS
- Ray Barrell & Dr Ian Hurst & Simon Kirby, 2008.
"Financial crises, regulation and growth,"
NIESR Discussion Papers
313, National Institute of Economic and Social Research.
- Henry Hansmann & Reinier Kraakman, 2000. "The End Of History For Corporate Law," Yale School of Management Working Papers ysm136, Yale School of Management, revised 01 Feb 2001.
- David Yermack, 1996.
"Good Timing: CEO Stock Option Awards and Company News Announcements,"
New York University, Leonard N. Stern School Finance Department Working Paper Seires
96-41, New York University, Leonard N. Stern School of Business-.
- Yermack, David, 1997. " Good Timing: CEO Stock Option Awards and Company News Announcements," Journal of Finance, American Finance Association, vol. 52(2), pages 449-76, June.
- Fatemi, Ali & Luft, Carl, 2002. "Corporate risk management: Costs and benefits," Global Finance Journal, Elsevier, vol. 13(1), pages 29-38.
- Citanna, Alessandro & Villanacci, Antonio, 2000. "Existence and regularity of partially revealing rational expectations equilibrium in finite economies," Journal of Mathematical Economics, Elsevier, vol. 34(1), pages 1-26, August.
- Fligstein, Neil & Choo, Jennifer, 2005. "Law and Corporate Governance," Institute for Research on Labor and Employment, Working Paper Series qt6nt8622j, Institute of Industrial Relations, UC Berkeley.
- Dechow, Patricia M. & Sloan, Richard G., 1991. "Executive incentives and the horizon problem : An empirical investigation," Journal of Accounting and Economics, Elsevier, vol. 14(1), pages 51-89, March.
- Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-29, May.
- James G. March, 2004. "Parochialism in the Evolution of a Research Community: The Case of Organization Studies," Management and Organization Review, International Association of Chinese Management Research, vol. 1(1), pages 5-22, June.
- Isabelle Huault & V. Perret & S. Charreire-Petit, 2007. "Management," Post-Print halshs-00337676, HAL.
- Ittner, Christopher D. & Larcker, David F., 2001. "Assessing empirical research in managerial accounting: a value-based management perspective," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 349-410, December.
- Gary C. Biddle & Robert M. Bowen & James S. Wallace, 1999. "Evidence On Eva," Journal of Applied Corporate Finance, Morgan Stanley, vol. 12(2), pages 69-79.
- Dickerson, Andrew P & Gibson, Heather D & Tsakalotos, Euclid, 1995. "Short-Termism and Underinvestment: The Influence of Financial Systems," The Manchester School of Economic & Social Studies, University of Manchester, vol. 63(4), pages 351-67, December.
- Kevin Campbell & Robin Limmack, 1997. "Long-term over-reaction in the UK stock market and size adjustments," Applied Financial Economics, Taylor & Francis Journals, vol. 7(5), pages 537-548.
- Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2006. "Managerial incentives and risk-taking," Journal of Financial Economics, Elsevier, vol. 79(2), pages 431-468, February.
- Ball, Ray & Bartov, Eli, 1996. "How naive is the stock market's use of earnings information?," Journal of Accounting and Economics, Elsevier, vol. 21(3), pages 319-337, June.
- Hyman P. Minsky, 1992. "The Financial Instability Hypothesis," Economics Working Paper Archive wp_74, Levy Economics Institute.
- Marens, Richard & Wicks, Andrew, 1999. "Getting Real: Stakeholder Theory, Managerial Practice, and the General Irrelevance of Fiduciary Duties Owed to Shareholders," Business Ethics Quarterly, Cambridge University Press, vol. 9(02), pages 273-293, April.
- Christian Langmann, 2007. "Stock Market Reaction and Stock Option Plans: Evidence from Germany," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 59(1), pages 85-106, January.
When requesting a correction, please mention this item's handle: RePEc:eee:aosoci:v:34:y:2009:i:6-7:p:835-848. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.