The current financial and economic crisis: empirical and methodological issues
Autor(a) principal: | |
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Data de Publicação: | 2012 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional da UNESP |
Texto Completo: | http://www.asers.eu/journals/jasf/jasf-past-issues.html http://hdl.handle.net/11449/124767 |
Resumo: | In this paper we describe the main causes of the recent financial crisis as a result of many theoretical, methodological, and practical shortcomings mostly according to heterodox, but also including some important orthodox economists. At theoretical level, there are problems concerning teaching and using economic models with overly unrealistic assumptions. In the methodological front, we find the unsuspected shadow of Milton Friedman’s ‘unrealisticism of assumptions’ thesis lurking behind the construction of this kind of models and the widespread neglect of methodological issues. Of course, the most evident shortcomings are at the practical level: (i) huge interests of the participants in the financial markets (banks, central bankers, regulators, rating agencies mortgage brokers, politicians, governments, executives, economists, etc. mainly in the US, Canada and Europe, but also in Japan and the rest of the world), (ii) in an almost completely free financial and economic market, that is, one (almost) without any regulation or supervision, (iii) decision-taking upon some not well regarded qualities, like irresponsibility, ignorance, and inertia; and (iv) difficulties to understand the current crisis as well as some biases directing economic rescues by governments. Following many others, we propose that we take this episode as an opportunity to reflect on, and hopefully redirect, economic theory and practice. |
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The current financial and economic crisis: empirical and methodological issuesFinancial crisesEconomic methodologyModel-buildingIn this paper we describe the main causes of the recent financial crisis as a result of many theoretical, methodological, and practical shortcomings mostly according to heterodox, but also including some important orthodox economists. At theoretical level, there are problems concerning teaching and using economic models with overly unrealistic assumptions. In the methodological front, we find the unsuspected shadow of Milton Friedman’s ‘unrealisticism of assumptions’ thesis lurking behind the construction of this kind of models and the widespread neglect of methodological issues. Of course, the most evident shortcomings are at the practical level: (i) huge interests of the participants in the financial markets (banks, central bankers, regulators, rating agencies mortgage brokers, politicians, governments, executives, economists, etc. mainly in the US, Canada and Europe, but also in Japan and the rest of the world), (ii) in an almost completely free financial and economic market, that is, one (almost) without any regulation or supervision, (iii) decision-taking upon some not well regarded qualities, like irresponsibility, ignorance, and inertia; and (iv) difficulties to understand the current crisis as well as some biases directing economic rescues by governments. Following many others, we propose that we take this episode as an opportunity to reflect on, and hopefully redirect, economic theory and practice.Universidade Estadual Paulista Júlio de Mesquita Filho, Departamento de Economia, Faculdade de Ciências e Letras de Araraquara, Araraquara, Rodovia Araraquara-Jaú Km 1, Machados, CEP 14800901, SP, BrasilUniversidade Estadual Paulista Júlio de Mesquita Filho, Departamento de Economia, Faculdade de Ciências e Letras de Araraquara, Araraquara, Rodovia Araraquara-Jaú Km 1, Machados, CEP 14800901, SP, BrasilUniversidade Estadual Paulista (Unesp)Strachman, Eduardo [UNESP]Fucidji, José Ricardo2015-07-15T18:27:40Z2015-07-15T18:27:40Z2012info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article95-123http://www.asers.eu/journals/jasf/jasf-past-issues.htmlJournal of Advanced Studies in Finance, v. 3, n. 1, p. 95-123, 2012.2068-8393http://hdl.handle.net/11449/12476740701061761049358639709435538882Currículo Lattesreponame:Repositório Institucional da UNESPinstname:Universidade Estadual Paulista (UNESP)instacron:UNESPengJournal of Advanced Studies in Financeinfo:eu-repo/semantics/openAccess2024-06-10T19:42:37Zoai:repositorio.unesp.br:11449/124767Repositório InstitucionalPUBhttp://repositorio.unesp.br/oai/requestopendoar:29462024-08-05T21:49:16.466646Repositório Institucional da UNESP - Universidade Estadual Paulista (UNESP)false |
dc.title.none.fl_str_mv |
The current financial and economic crisis: empirical and methodological issues |
title |
The current financial and economic crisis: empirical and methodological issues |
spellingShingle |
The current financial and economic crisis: empirical and methodological issues Strachman, Eduardo [UNESP] Financial crises Economic methodology Model-building |
title_short |
The current financial and economic crisis: empirical and methodological issues |
title_full |
The current financial and economic crisis: empirical and methodological issues |
title_fullStr |
The current financial and economic crisis: empirical and methodological issues |
title_full_unstemmed |
The current financial and economic crisis: empirical and methodological issues |
title_sort |
The current financial and economic crisis: empirical and methodological issues |
author |
Strachman, Eduardo [UNESP] |
author_facet |
Strachman, Eduardo [UNESP] Fucidji, José Ricardo |
author_role |
author |
author2 |
Fucidji, José Ricardo |
author2_role |
author |
dc.contributor.none.fl_str_mv |
Universidade Estadual Paulista (Unesp) |
dc.contributor.author.fl_str_mv |
Strachman, Eduardo [UNESP] Fucidji, José Ricardo |
dc.subject.por.fl_str_mv |
Financial crises Economic methodology Model-building |
topic |
Financial crises Economic methodology Model-building |
description |
In this paper we describe the main causes of the recent financial crisis as a result of many theoretical, methodological, and practical shortcomings mostly according to heterodox, but also including some important orthodox economists. At theoretical level, there are problems concerning teaching and using economic models with overly unrealistic assumptions. In the methodological front, we find the unsuspected shadow of Milton Friedman’s ‘unrealisticism of assumptions’ thesis lurking behind the construction of this kind of models and the widespread neglect of methodological issues. Of course, the most evident shortcomings are at the practical level: (i) huge interests of the participants in the financial markets (banks, central bankers, regulators, rating agencies mortgage brokers, politicians, governments, executives, economists, etc. mainly in the US, Canada and Europe, but also in Japan and the rest of the world), (ii) in an almost completely free financial and economic market, that is, one (almost) without any regulation or supervision, (iii) decision-taking upon some not well regarded qualities, like irresponsibility, ignorance, and inertia; and (iv) difficulties to understand the current crisis as well as some biases directing economic rescues by governments. Following many others, we propose that we take this episode as an opportunity to reflect on, and hopefully redirect, economic theory and practice. |
publishDate |
2012 |
dc.date.none.fl_str_mv |
2012 2015-07-15T18:27:40Z 2015-07-15T18:27:40Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://www.asers.eu/journals/jasf/jasf-past-issues.html Journal of Advanced Studies in Finance, v. 3, n. 1, p. 95-123, 2012. 2068-8393 http://hdl.handle.net/11449/124767 4070106176104935 8639709435538882 |
url |
http://www.asers.eu/journals/jasf/jasf-past-issues.html http://hdl.handle.net/11449/124767 |
identifier_str_mv |
Journal of Advanced Studies in Finance, v. 3, n. 1, p. 95-123, 2012. 2068-8393 4070106176104935 8639709435538882 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Journal of Advanced Studies in Finance |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
95-123 |
dc.source.none.fl_str_mv |
Currículo Lattes reponame:Repositório Institucional da UNESP instname:Universidade Estadual Paulista (UNESP) instacron:UNESP |
instname_str |
Universidade Estadual Paulista (UNESP) |
instacron_str |
UNESP |
institution |
UNESP |
reponame_str |
Repositório Institucional da UNESP |
collection |
Repositório Institucional da UNESP |
repository.name.fl_str_mv |
Repositório Institucional da UNESP - Universidade Estadual Paulista (UNESP) |
repository.mail.fl_str_mv |
|
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1808129361600053248 |