IDEAS home Printed from https://ideas.repec.org/p/cbr/cbrwps/wp392.html
   My bibliography  Save this paper

Governance, Regulation and Financial Market Instability: The Implciations for Policy

Author

Listed:
  • Sue Konzelmann
  • Frank Wilkinson
  • Marc Fovargue-Davies
  • Duncan Sankey

Abstract

Just as the 1929 Stock Market Crash discredited Classical economic theory and policy and opened the way for Keynesianism, a consequence of the collapse of confidence in financial markets and the banking system – and the effect that this has had on the global macro economy – is currently discrediting the ‘conventional wisdom’ of neo-liberalism. This paper argues that at the heart of the crisis is a breakdown in governance that has its roots in the co-evolution of political and economic developments and of economic theory and policy since the 1929 Stock Market Crash and the Great Depression that followed. However, while many are looking back to the Great Depression and to the theories and policies that seemed to contribute to recovery during the first part of the twentieth century, we argue that the current context is different from the earlier one; and there are more recent events that may provide better insight into the causes and contributing factors giving rise to the present crisis and to the implications for theory and policy that follow.

Suggested Citation

  • Sue Konzelmann & Frank Wilkinson & Marc Fovargue-Davies & Duncan Sankey, 2009. "Governance, Regulation and Financial Market Instability: The Implciations for Policy," Working Papers wp392, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp392
    Note: PRO-2
    as

    Download full text from publisher

    File URL: https://www.jbs.cam.ac.uk/wp-content/uploads/2023/05/cbrwp392.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Simon Deakin & Ajit Singh, 2009. "The Stock Market, the Market for Corporate Control and the Theory of the Firm: Legal and Economic Perspectives and Implications for Public Policy," Chapters, in: Per-Olof Bjuggren & Dennis C. Mueller (ed.), The Modern Firm, Corporate Governance and Investment, chapter 9, Edward Elgar Publishing.
    2. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    3. 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.
    4. Singh, Ajit, 1975. "Take-Overs, Economic Natural Selection, and the Theory of the Firm: Evidence from the Postwar United Kingdom Experience," Economic Journal, Royal Economic Society, vol. 85(339), pages 497-515, September.
    5. Laidler,David, 1999. "Fabricating the Keynesian Revolution," Cambridge Books, Cambridge University Press, number 9780521641739, Enero-Abr.
    6. Smith, Adam, 1977. "An Inquiry into the Nature and Causes of the Wealth of Nations," University of Chicago Press Economics Books, University of Chicago Press, number 9780226763743 edited by Cannan, Edwin.
    7. Moggridge, D E, 1992. "The," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 207-209, Summer.
    8. Yago, Glenn, 1991. "Junk Bonds: How High Yield Securities Restructured Corporate America," OUP Catalogue, Oxford University Press, number 9780195061116, Decembrie.
    9. Hyman P. Minsky, 1992. "The Financial Instability Hypothesis," Economics Working Paper Archive wp_74, Levy Economics Institute.
    10. Bengt Holmstrom & Steven N. Kaplan, 2001. "Corporate Governance and Merger Activity in the U.S.: Making Sense of the 1980s and 1990s," NBER Working Papers 8220, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sagar Hernández Chuliá, 2016. "La relación entre neoinstitucionalismo económico y sociológico," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 18(35), pages 123-149, July-Dece.
    2. Hobbs, Jill E. & Weseen, Simon & Kerr, William A., 2012. "Transaction Costs, Hold-Ups and Governance in Ethanol Supply Chains," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125158, International Association of Agricultural Economists.
    3. Ghosh, Ranjan & Kathuria, Vinish, 2014. "The transaction costs driving captive power generation: Evidence from India," Energy Policy, Elsevier, vol. 75(C), pages 179-188.
    4. Xiaoqing Li & Yu Zheng & Catherine L. Wang, 2016. "Inter-firm collaboration in new product development in Chinese pharmaceutical companies," Asia Pacific Journal of Management, Springer, vol. 33(1), pages 165-193, March.
    5. Jeff S. Johnson & Ravipreet S. Sohi, 2016. "Understanding and resolving major contractual breaches in buyer–seller relationships: a grounded theory approach," Journal of the Academy of Marketing Science, Springer, vol. 44(2), pages 185-205, March.
    6. Thomas Kopp & Ashok K. Mishra, 2022. "Perishability and market power in Nepalese food crop production," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(2), pages 518-540, June.
    7. Andre Luis da Silva Leite & Nei Antonio Nunes, 2020. "Institutional Environment and the Strategies of the Firms of the Brazilian Electricity Industry," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 53-58.
    8. Anna M. Carabelli & Mario A. Cedrini, 2014. "Keynes's General Theory , Treatise on Money and Tract on Monetary Reform : different theories, same methodological approach?," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 21(6), pages 1060-1084, December.
    9. William R. White, 2010. "The Mayekawa Lecture: Some Alternative Perspectives on Macroeconomic Theory and Some Policy Implications," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 28, pages 35-58, November.
    10. Goetz von Peter, 2005. "Debt-Deflation: Concepts, and a Stylised Model," Macroeconomics 0505001, University Library of Munich, Germany.
    11. Brendan Markey‐Towler, 2019. "The New Microeconomics: A Psychological, Institutional, and Evolutionary Paradigm with Neoclassical Economics as a Special Case," American Journal of Economics and Sociology, Wiley Blackwell, vol. 78(1), pages 95-135, January.
    12. Roberto Ippoliti & Greta Falavigna, 2014. "Public Health Institutions, Clinical Research and Protection System of Patients’ Rights: An Impact Evaluation of Public Policy," Public Organization Review, Springer, vol. 14(2), pages 109-125, June.
    13. Barbieri, Elisa & Huang, Manli & Pi, Shenglei & Pollio, Chiara & Rubini, Lauretta, 2021. "Investigating the linkages between industrial policies and M&A dynamics: Evidence from China," China Economic Review, Elsevier, vol. 69(C).
    14. Miller, Peter & Kurunmäki, Liisa & O'Leary, Ted, 2008. "Accounting, hybrids and the management of risk," Accounting, Organizations and Society, Elsevier, vol. 33(7-8), pages 942-967.
    15. Schwesinger, Georg & Müller, Stephan & Lundan, Sarianna M., 2016. "Governance Structures, Cultural Distance, and Socialization Dynamics: Further Challenges for the Modern Corporation," VfS Annual Conference 2016 (Augsburg): Demographic Change 145907, Verein für Socialpolitik / German Economic Association.
    16. Han, Lei, 2009. "Market acceptance of cloud computing: An analysis of market structure, price models and service requirements," Bayreuth Reports on Information Systems Management 42, University of Bayreuth, Chair of Information Systems Management.
    17. Vincent Barnett, 2001. "Calling up the Reserves: Keynes, Tugan-Baranovsky and Russian War Finance," Europe-Asia Studies, Taylor & Francis Journals, vol. 53(1), pages 151-169.
    18. Ursino Giovanni, 2015. "Supply Chain Control: A Theory of Vertical Integration," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(4), pages 1831-1866, October.
    19. Gordon Fletcher, 2006. "In Search of Dennis Robertson: Through the Looking Glass and What I Found There," Working Papers 200621, University of Liverpool, Department of Economics.
    20. Ghozzi, Houda & Platoni, Silvia & Tillie, Pascal & Soregaroli, Claudio, 2018. "TCE determinants and governance forms in the EU “Non-GMO” soybean supply chain," Food Policy, Elsevier, vol. 78(C), pages 68-80.

    More about this item

    Keywords

    corporate governance; regulation; financial market instability;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • P17 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Performance and Prospects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cbr:cbrwps:wp392. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ruth Newman (email available below). General contact details of provider: http://www.jbs.cam.ac.uk .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.