The psychology of financial markets: Keynes, Minsky and emotional finance
This paper is concerned with drawing on both psychology and economics in order to amplify the psychological content of Minsky’s account of the behaviour which leads up to financial turmoil, and market responses to it. In exploring recent developments in behavioural finance, the author finds that a crucial element is given inadequate attention: the motivation for action under uncertainty. Yet earlier traditions in economic thought (notably the Scottish Enlightenment thought) incorporated the role of psychological motivation under uncertainty. One can see this emerging again in Keynes’s analysis of financial behaviour, and again in Minsky’s financial instability hypothesis. The methodological features of their economic analysis are explored which allow this crucial psychological input to be present, focusing in particular on the role and meaning of rationality.
(This abstract was borrowed from another version of this item.)
|Date of creation:||May 2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.sceme.org.uk/|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:sti:wpaper:022/2008. 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: (Matthias Klaes)The email address of this maintainer does not seem to be valid anymore. Please ask Matthias Klaes to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.