Economia
Did Capitalism Fail? The Financial Crisis Five Years On
Did the global economic collapse in 2008 stem from structural failures in the capitalist system?
During his keynote address to the European Financial Congress, Institute Advisory Board member Roman Frydman argued that capitalism itself did not fail. Instead, Frydman placed the blame on those who promulgated the theories that guided policy makers.
“I would like to pin a significant share of the blame on economists,” Frydman said. “It was their ideas concerning the role and functioning of financial markets in capitalist economies that provided the supposedly scientific underpinning for policy decisions and financial innovations that made the crisis much more likely, if not inevitable.”
And while some might think the influence of academics on policy is limited, Frydman disagrees. “Economists’ model-building is not some harmless academic exercise,” he said. “These models wield significant influence over real financial-market participants, policymakers, and the wider public.”
These theories created a faith in the mechanistic rational market that was a key cause of the crisis, Frydman suggested, deriding the ”unsuccessful – and largely American – experiment in viewing the macroeconomy and financial markets as machines.”
This view failed because it doesn’t account for imperfect knowledge, a key factor in the economy according to Frydman, one of the founders of Imperfect Knowledge Economics (IKE) and Chair of the Institute’s IKE program.
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Economia
Raízes da crise
Did Capitalism Fail? The Financial Crisis Five Years On
Did the global economic collapse in 2008 stem from structural failures in the capitalist system?
During his keynote address to the European Financial Congress, Institute Advisory Board member Roman Frydman argued that capitalism itself did not fail. Instead, Frydman placed the blame on those who promulgated the theories that guided policy makers.
“I would like to pin a significant share of the blame on economists,” Frydman said. “It was their ideas concerning the role and functioning of financial markets in capitalist economies that provided the supposedly scientific underpinning for policy decisions and financial innovations that made the crisis much more likely, if not inevitable.”
And while some might think the influence of academics on policy is limited, Frydman disagrees. “Economists’ model-building is not some harmless academic exercise,” he said. “These models wield significant influence over real financial-market participants, policymakers, and the wider public.”
These theories created a faith in the mechanistic rational market that was a key cause of the crisis, Frydman suggested, deriding the ”unsuccessful – and largely American – experiment in viewing the macroeconomy and financial markets as machines.”
This view failed because it doesn’t account for imperfect knowledge, a key factor in the economy according to Frydman, one of the founders of Imperfect Knowledge Economics (IKE) and Chair of the Institute’s IKE program.
Mais
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- Estabilidade Financeira E Política Monetária
Financial Stability and Monetary Policy: How Closely Interlinked? by Frank Smets European Central Bank Abstract The recent financial crisis has again raised the question to what extent price-stability-oriented monetary policy frameworks should take...
- O Caminho Da Crise
Bailout economics – two decades of monetary excesses 1987 Stock market crash 1988-90 Savings and Loan crisis 1990 Stock market “mini-crash” 1990-91 Gulf War I 1990-91 US mini-recession 1994 Mexican peso crisis 1997 Asian financial crisis...
- Como Mais Regulamentações Provocam Mais Risco
The Dodd-Frank Act versus the Rule of Law October 9, 2012 In response to the 2008 financial collapse, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank increased regulation of banks, stockbrokers, insurers...
- Metas Da Inflação
Inflation Targeting Hits the WallMises Daily:Wednesday, February 01, 2012 by Antony P. MuellerThe financial-market crisis is not over but has grown into a vicious sovereign-debt crisis. Nevertheless, monetary policy makers of the major economies go on...
- Meltdown
Ben Bernanke: "Virtually every large financial firm in the world was in significant danger of going bankrupt. And we knew — and I knew — based on my experience as a policymaker, I knew that if the global financial system were to collapse, in the...