Understanding financial crisis through accounting models
This paper presents evidence that accounting (or flow-of-funds) macroeconomic models helped anticipate the credit crisis and economic recession. Equilibrium models ubiquitous in mainstream policy and research did not. This study traces the intellectual pedigrees of the accounting approach as an alternative to neo-classical economics, and the post-war rise and decline of flow-of-funds models in policy use. It includes contemporary case studies of both types of models, and considers why the accounting approach has remained outside mainstream economics. It provides constructive recommendations on revising methods of financial stability assessment and advocates an 'accounting of economics'.
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.:
- Hopwood, Anthony G., 2009. "Exploring the interface between accounting and finance," Accounting, Organizations and Society, Elsevier, vol. 34(5), pages 549-550, July.
- Simon Chapple, 1991. "Did Kalecki Get There First? The Race for the General Theory," History of Political Economy, Duke University Press, vol. 23(2), pages 243-261, Summer.
- Tovar, Camilo Ernesto, 2008.
"DSGE Models and Central Banks,"
Economics Discussion Papers
2008-30, Kiel Institute for the World Economy (IfW).
- Tovar, Camilo Ernesto, 2009. "DSGE Models and Central Banks," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 3, pages 1-31.
- Claudio E. V. Borio, 2004. "Market distress and vanishing liquidity: anatomy and policy options," BIS Working Papers 158, Bank for International Settlements.
- Moritz Schularick & Alan M. Taylor, 2009.
"Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870-2008,"
NBER Working Papers
15512, National Bureau of Economic Research, Inc.
- Moritz Schularick & Alan M. Taylor, 2012. "Credit Booms Gone Bust: Monetary Policy, Leverage Cycles, and Financial Crises, 1870-2008," American Economic Review, American Economic Association, vol. 102(2), pages 1029-1061, April.
- Schularick, Moritz & Taylor, Alan M., 2009. "Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870-2008," CEPR Discussion Papers 7570, C.E.P.R. Discussion Papers.
- Engelbert Stockhammer, 2000.
"Financialization and the Slowdown of Accumulation,"
geewp14, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
- 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 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.
- Wynne Godley & Marc Lavoie, 2007. "Fiscal Policy in a Stock-Flow Consistent (SFC) Model," Economics Working Paper Archive wp_494, Levy Economics Institute.
- Edward P. Lazear, 2000. "Economic Imperialism," The Quarterly Journal of Economics, Oxford University Press, vol. 115(1), pages 99-146.
- Reinhart, Carmen, 2009.
"The Second Great Contraction,"
21485, University Library of Munich, Germany.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, number 8973.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
- Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
- Keen, Steve, 2010.
"Solving the paradox of monetary profits,"
Economics Discussion Papers
2010-2, Kiel Institute for the World Economy (IfW).
- Keen, Steve, 2010. "Solving the paradox of monetary profits," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 4, pages 1-32.
- Arnold, Patricia J., 2009. "Global financial crisis: The challenge to accounting research," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 803-809, August.
- Wynne Godley & Gennaro Zezza, 2006. "Debt And Lending: A Cri De Coeur," Economics Policy Note Archive 06-4, Levy Economics Institute.
- Blinder, Alan S & Stiglitz, Joseph E, 1983.
"Money, Credit Constraints, and Economic Activity,"
American Economic Review,
American Economic Association, vol. 73(2), pages 297-302, May.
- Claudio E. V. Borio & Philip Lowe, 2004. "Securing sustainable price stability: should credit come back from the wilderness?," BIS Working Papers 157, Bank for International Settlements.
- Wynne Godley & Dimitri B. Papadimitriou & Greg Hannsgen & Gennaro Zezza, 2007. "The U.S. Economy: Is There a Way Out of the Woods?," Economics Strategic Analysis Archive sa_nov_07, Levy Economics Institute.
- Dean Baker & J. Bradford Delong & Paul R. Krugman, 2005. "Asset Returns and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 36(1), pages 289-330.
- 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.
- Luigi L. Pasinetti, 2005. "The Cambridge School of Keynesian Economics," Cambridge Journal of Economics, Oxford University Press, vol. 29(6), pages 837-848, November.
- Godley, Wynne, 1999. "Money and Credit in a Keynesian Model of Income Determination," Cambridge Journal of Economics, Oxford University Press, vol. 23(4), pages 393-411, July.
- Jordan, J S, 1989. "The Economics of Accounting Information Systems," American Economic Review, American Economic Association, vol. 79(2), pages 140-145, May.
When requesting a correction, please mention this item's handle: RePEc:eee:aosoci:v:35:y:2010:i:7:p:676-688. 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: (Dana Niculescu)
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.