Failing Institutions Are at the Core of the U.S. Financial Crisis
This paper uses the structure of institutional economics to provide an explanation of the recent U.S. financial crisis. Institutional theory suggests that a county’s political, legal, social, and cultural institutions determine and characterize its economy. An institutional perspective of financial crises therefore incorporates unquantifiable aspects of the real world. Different institutions interacted to ignite and fuel the global crisis. A thorough understanding of all of the legal, political, and cultural institution that encompass a society, as well as their role in the market, is needed to explain and avoid the reoccurrences of financial crises.
|Date of creation:||16 Oct 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://economics.sas.upenn.edu/pier
More information through EDIRC
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.:
- Daron Acemoglu & James A. Robinson, 2008.
"Persistence of Power, Elites, and Institutions,"
American Economic Review,
American Economic Association, vol. 98(1), pages 267-93, March.
- Daron Acemoglu & James A. Robinson, 2006. "Persistence of Power, Elites and Institutions," NBER Working Papers 12108, National Bureau of Economic Research, Inc.
- Acemoglu, Daron & Robinson, James A, 2006. "Persistence of Power, Elites and Institutions," CEPR Discussion Papers 5603, C.E.P.R. Discussion Papers.
- North, Douglass C., 1993.
"Economic Performance through Time,"
Nobel Prize in Economics documents
1993-2, Nobel Prize Committee.
- 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.
- 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.
- 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.
- 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.
- 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.
- Polterovich, Victor, 2007. "Institutional Trap," MPRA Paper 20595, University Library of Munich, Germany.
- Simon, Herbert A., 1984. "On the behavioral and rational foundations of economic dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 5(1), pages 35-55, March.
- 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.
- Douglass C. North, 2005.
"Introduction to Understanding the Process of Economic Change
[Understanding the Process of Economic Change]," Introductory Chapters, Princeton University Press.
- North, Douglass C., 1989. "Institutions and economic growth: An historical introduction," World Development, Elsevier, vol. 17(9), pages 1319-1332, September.
When requesting a correction, please mention this item's handle: RePEc:pen:papers:12-040. 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: (Dolly Guarini)
If references are entirely missing, you can add them using this form.