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Financial Crises And Econonomic Institutions An Institutional Account Of The Usa Financial Crisis

  • Yochanan Shachmurove

This paper uses the framework of institutional economics to explain the recurring phenomena of financial crises. How do various institutions fail in predicting, responding to and reducing the burden of the crises? How do they further contribute to the domino effects that nearly led to the collapse of financial institutions worldwide? Institutional economics holds that a country's institutions - its political, educational, and social systems - determine and characterize its economy. Institutional environments shape the way people perceive economic relations. The interdependence of economics, law and morality characterize the ability of institutions to act on unforeseen circumstances and to adapt to changes.

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Article provided by Economic Laboratory for Transition Research (ELIT) in its journal Montenegrin Journal of Economics.

Volume (Year): 8 (2012)
Issue (Month): 2 ()
Pages: 45-52

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Handle: RePEc:mje:mjejnl:v:8:y:2012:i:2:p:45-52
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  1. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
  2. Efraim Benmelech & Jennifer Dlugosz, 2009. "The Credit Rating Crisis," NBER Working Papers 15045, National Bureau of Economic Research, Inc.
    • Efraim Benmelech & Jennifer Dlugosz, 2010. "The Credit Rating Crisis," NBER Chapters, in: NBER Macroeconomics Annual 2009, Volume 24, pages 161-207 National Bureau of Economic Research, Inc.
  3. Daron Acemoglu, 2008. "Oligarchic Versus Democratic Societies," Journal of the European Economic Association, MIT Press, vol. 6(1), pages 1-44, 03.
  4. Oliver E. Williamson, 2003. "Examining economic organization through the lens of contract," Industrial and Corporate Change, Oxford University Press, vol. 12(4), pages 917-942, August.
  5. North, Douglass C., 1989. "Institutions and economic growth: An historical introduction," World Development, Elsevier, vol. 17(9), pages 1319-1332, September.
  6. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change
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    ," Introductory Chapters, Princeton University Press.
  7. Robert J. Shiller, 2006. "Tools for Financial Innovation: Neoclassical versus Behavioral Finance," The Financial Review, Eastern Finance Association, vol. 41(1), pages 1-8, 02.
  8. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
  9. Polterovich, Victor, 2007. "Institutional Trap," MPRA Paper 20595, University Library of Munich, Germany.
  10. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  11. Jeffrey D. Sachs, 2003. "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income," NBER Working Papers 9490, National Bureau of Economic Research, Inc.
  12. Yochanan Shachmurove, 2010. "The Next Financial Crisis," PIER Working Paper Archive 10-027, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  13. North, Douglass C., 1993. "Economic Performance through Time," Nobel Prize in Economics documents 1993-2, Nobel Prize Committee.
  14. repec:cup:cbooks:9780521290999 is not listed on IDEAS
  15. Oliver E. Williamson, 2002. "The Theory of the Firm as Governance Structure: From Choice to Contract," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 171-195, Summer.
  16. Alberto Manconi & Massimo Massa & Ayako Yasuda, 2010. "The Behavior of Intoxicated Investors: The role of institutional investors in propagating the crisis of 2007-2008," NBER Working Papers 16191, National Bureau of Economic Research, Inc.
  17. Acemoglu, Daron & Cantoni, Davide & Johnson, Simon & Robinson, James A., 2011. "The consequences of radical reform: The French revolution," Munich Reprints in Economics 20170, University of Munich, Department of Economics.
  18. George A. Akerlof, 2009. "How Human Psychology Drives the Economy and Why It Matters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1175-1175.
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