IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/15892.html
   My bibliography  Save this paper

“No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models

Author

Listed:
  • Bezemer, Dirk J

Abstract

This paper presents evidence that accounting (or flow-of-fund) macroeconomic models helped anticipate the credit crisis and economic recession. Equilibrium models ubiquitous in mainstream policy and research did not. This study identifies core differences, traces their intellectual pedigrees, and includes case studies of both types of models. It so provides constructive recommendations on revising methods of financial stability assessment. Overall, the paper is a plea for research into the link between accounting concepts and practices and macro economic outcomes.

Suggested Citation

  • Bezemer, Dirk J, 2009. "“No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models," MPRA Paper 15892, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:15892
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/15892/1/MPRA_paper_15892.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Giuseppe Fontana & Bill Gerrard, 2002. "The Significance of the Monetary Context of Economic Behavior," Review of Social Economy, Taylor & Francis Journals, vol. 60(2), pages 243-262.
    2. Das Dilip K., 2006. "Globalization in the World of Finance: An Analytical History," Global Economy Journal, De Gruyter, vol. 6(1), pages 1-25, February.
    3. Wynne Goldey & Marc Lavoie, 2007. "Fiscal policy in a stock-flow consistent (SFC) model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 30(1), pages 79-100.
    4. Dean Baker, 2002. "The Run-up in Home Prices: A Bubble," Challenge, Taylor & Francis Journals, vol. 45(6), pages 93-119.
    5. Baumol, William J, 1977. "Say's (at Least) Eight Laws, or What Say and James Mill May Really Have Meant," Economica, London School of Economics and Political Science, vol. 44(174), pages 145-161, May.
    6. Giuseppe Fontana, 2000. "Post Keynesians and Circuitists on Money and Uncertainty: An Attempt at Generality," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 23(1), pages 27-48, September.
    7. Engelbert Stockhammer, 2004. "Financialisation and the slowdown of accumulation," Cambridge Journal of Economics, Oxford University Press, vol. 28(5), pages 719-741, September.
    8. Jordan, J S, 1989. "The Economics of Accounting Information Systems," American Economic Review, American Economic Association, vol. 79(2), pages 140-145, May.
    9. Steve Keen, 1995. "Finance and Economic Breakdown: Modeling Minsky’s “Financial Instability Hypothesis”," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 17(4), pages 607-635, July.
    10. Hopwood, Anthony G., 2009. "Exploring the interface between accounting and finance," Accounting, Organizations and Society, Elsevier, vol. 34(5), pages 549-550, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Strizhichenko Konstantin A., 2013. "Title," The Problems of Economy, RESEARCH CENTRE FOR INDUSTRIAL DEVELOPMENT PROBLEMS of NAS (KHARKIV, UKRAINE), issue 2, pages 20-24.
    2. Srinivas Yanamandra, 2014. "Minsky, Monetary Policy, and Mint Street: Challenges for the Art of Monetary Policymaking in Emerging Economies," Economics Working Paper Archive wp_820, Levy Economics Institute.
    3. Tim Jackson & Peter Victor & Asjad Naqvi, 2016. "Towards a Stock-Flow Consistent Ecological Macroeconomics," WWWforEurope Working Papers series 114, WWWforEurope.
    4. Keen, Steve, 2013. "A monetary Minsky model of the Great Moderation and the Great Recession," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 221-235.
    5. Verick, Sher. & Islam, Iyanatul., 2010. "The great recession of 2008-2009 : causes, consequences and policy responses," ILO Working Papers 994576933402676, International Labour Organization.
    6. Adamopoulou, Effrosyni & Tanzi, Giulia M., 2014. "Academic Performance and the Great Recession," MPRA Paper 54913, University Library of Munich, Germany.
    7. Emanuela Ghignoni, 2015. "Family background and university dropouts during the crisis: the case of Italy," Working Papers 169, University of Rome La Sapienza, Department of Public Economics.
    8. Effrosyni Adamopoulou & Giulia Martina Tanzi, 2017. "Academic Drop-Out and the Great Recession," Journal of Human Capital, University of Chicago Press, vol. 11(1), pages 35-71.
    9. Tim Jackson & Ben Drake & Peter Victor & Kurt Kratena & Mark Sommer, 2014. "Literature review and model development," WWWforEurope Working Papers series 65, WWWforEurope.
    10. Martin Janicko, 2015. "Mainstream Versus Heterodox View on Financial Innovation," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 4(1), pages 1-24, March.
    11. Martin Janíčko, 2012. "Financial Innovations and Economic Fluctuation from the Present Perspective," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2012(6), pages 18-33.
    12. Lukáš Kovanda, 2011. "Ekonomie budoucnosti: čtyři možné scénáře
      [The Future of Economics: Four Possible Scenarios]
      ," Politická ekonomie, University of Economics, Prague, vol. 2011(6), pages 743-758.

    More about this item

    Keywords

    credit crisis; recession; prediction; macroeconomics; flow of funds; financialization; neoclassical economics; accounting research;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications

    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:pra:mprapa:15892. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.