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Toward a supply-side theory of financial innovation

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  • Awrey, Dan

Abstract

Innovation. The word is evocative of ideas, products and processes which have somehow made the world a better place. Prior to the global financial crisis, many viewed financial innovation as unequivocally falling into this category. Underpinning this view was a pervasive belief in the self-correcting nature of markets and their consequent optimality as mechanisms for allocating society’s resources. This belief exerted a profound influence on how we regulated financial markets and institutions.

Suggested Citation

  • Awrey, Dan, 2013. "Toward a supply-side theory of financial innovation," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 401-419.
  • Handle: RePEc:eee:jcecon:v:41:y:2013:i:2:p:401-419 DOI: 10.1016/j.jce.2013.03.011
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    References listed on IDEAS

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    Cited by:

    1. Panourgias, Nikiforos S., 2015. "Capital markets integration: A sociotechnical study of the development of a cross-border securities settlement system," Technological Forecasting and Social Change, Elsevier, vol. 99(C), pages 317-338.
    2. Pistor, Katharina, 2013. "Law in Finance," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 311-314.
    3. Anastasia Nesvetailova, 2015. "A Crisis of the Overcrowded Future: Shadow Banking and the Political Economy of Financial Innovation," New Political Economy, Taylor & Francis Journals, vol. 20(3), pages 431-453, June.
    4. Lechman, Ewa & Marszk, Adam, 2015. "ICT technologies and financial innovations: The case of exchange traded funds in Brazil, Japan, Mexico, South Korea and the United States," Technological Forecasting and Social Change, Elsevier, vol. 99(C), pages 355-376.
    5. Pistor, Katharina, 2013. "A legal theory of finance," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 315-330.

    More about this item

    Keywords

    Financial innovation; Modigliani and Miller; OTC derivatives; Securitization; Structured finance; Swaps; Collateral swaps; Synthetic exchange-traded funds; ETFs; Dodd-Frank Act;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • B26 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Financial Economics
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

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