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John Kenneth Galbraith's Contributions to the Theory and Analysis of Speculative Financial Markets

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  • Charles Leathers
  • J. Patrick Raines

Abstract

Although separated from his systematic analyses of modern corporate capitalism and its institutional culture, John Kenneth Galbraith's theory of speculative manias that informed his analyses of the great bubbles of 1929 and 1987 stand as a vital part of his legacy to modern economics. In this paper, we put his contributions to our understanding of speculative financial markets into historical perspective, and explain how the current relevance of the insights that he provided has been enhanced by the combination of the growing dependency of the retirement plans of Americans on fluctuating stock prices, institutional developments in the financial sector, and government policies of financial deregulation and bailouts of failing financial institutions and funds.

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  • Charles Leathers & J. Patrick Raines, 2008. "John Kenneth Galbraith's Contributions to the Theory and Analysis of Speculative Financial Markets," Review of Political Economy, Taylor & Francis Journals, vol. 20(4), pages 551-568.
    • Handle: RePEc:taf:revpoe:v:20:y:2008:i:4:p:551-568
    DOI: 10.1080/09538250802308935
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    References listed on IDEAS

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    1. Barberis, Nicholas & Thaler, Richard, 2003. "A survey of behavioral finance," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 18, pages 1053-1128, Elsevier.
    2. Veblen, Thorstein, 1904. "Theory of Business Enterprise," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1904.
    3. Alan Greenspan, 2005. "Risk transfer and financial stability," Proceedings 968, Federal Reserve Bank of Chicago.
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    Cited by:

    1. Stephen Dunn, 2011. "Was Galbraith Right?," Challenge, Taylor & Francis Journals, vol. 54(6), pages 41-60.
    2. Douglas W MacKenzie, 2018. "Social Dividends, Entrepreneurial Discretion, and Bureaucratic Rules," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 44(1), pages 30-48, January.
    3. Adem LEVENT, 2016. "Power, Market and Techno-Structure in John Kenneth Galbraith’s Thought," Journal of Social and Administrative Sciences, KSP Journals, vol. 3(2), pages 214-218, June.

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