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Article
Publication date: 28 September 2010

Thomas Willett

The purpose of this paper is to discuss implications of the global crisis for economic and financial research and policy.

2261

Abstract

Purpose

The purpose of this paper is to discuss implications of the global crisis for economic and financial research and policy.

Design/methodology/approach

The paper reviews many recent studies on the crisis and offers the author's views on some of the most important lessons to be drawn from the crisis

Findings

The review counters views that the crisis reflected a basic failure of economics, but agrees that it undercuts some particular theories and approaches to economics. More attention needs to be given to imperfections in the operation of both markets and governments, drawing on insights from behavioral and neuro economics and finance and political economy analysis and recognizing the importance of limited information and uncertainty about correct models. The creation of perverse incentive structures explain a large part of the financial excesses that led to the crisis. Financial considerations need to be integrated much more closely with macroeconomic analysis and financial risk analysis needs to pay more attention to economic considerations. Useful insights can be drawn from many different theories and approaches and we should not expect any one theory to have all the answers. The excesses observed in the advanced economies do not imply that there are not enormous benefits to be gained from further financial liberalization in emerging market economies, but they do show that great care must be taken in establishing strong supervision of such liberalizations and highlight many of the dangers to look out for.

Originality/value

The paper offers a guide to the literature for those interested in learning more about the causes and effects of the crisis and policy responses and offers a number of suggestions for fruitful research topics and policy strategies.

Details

Indian Growth and Development Review, vol. 3 no. 2
Type: Research Article
ISSN: 1753-8254

Keywords

Article
Publication date: 18 August 2021

Thomas D. Willett

This study aims to critically review recent contributions to the methodology of financial economics and discuss how they relate to one another and directions for further research.

Abstract

Purpose

This study aims to critically review recent contributions to the methodology of financial economics and discuss how they relate to one another and directions for further research.

Design/methodology/approach

A critical review of recent literature on new methodologies for financial economics.

Findings

Recent books have made important contributions to the study of financial economics. They suggest new approaches that include an emphasis on radical uncertainty, adaptive markets, agent-based modeling and narrative economics, as well as extensions of behavioral finance to include concepts such as diagnostic expectations. Many of these contributions can be seen more as complements than substitutes and provide fruitful directions for further research. Efficient markets can be seen as holding under particular circumstances. A major them of most of these contributions is that the study of financial crises and other aspects of financial economics requires the use of multiple theories and approaches. No one approach will be sufficient.

Research limitations/implications

There are great opportunities for further research in financial economics making use of these new approaches.

Practical implications

These recent contributions can be quite useful for improved analysis by researchers, private participants in the financial sector and macroeconomic and regulatory officials.

Originality/value

Provides an introduction to these new approaches and highlights fruitful areas for their extensions and applications.

Article
Publication date: 21 November 2022

Orlando Gomes

This paper aims to survey literature on behavioral economics and finance, with particular emphasis on a selection of models, methods and tools that this strand of thought uses to…

Abstract

Purpose

This paper aims to survey literature on behavioral economics and finance, with particular emphasis on a selection of models, methods and tools that this strand of thought uses to approach and explain observable phenomena.

Design/methodology/approach

After a brief discussion on the meaning and context of behavioral economics, the manuscript identifies five topics of special interest: time preference, heuristics, emotions, finance and macro behavior. For each of these topics, relevant models, methods and tools are identified and scrutinized.

Findings

Behavioral economics and finance establish an effective bridge between orthodox economic thinking and new and revolutionary methods of analysis. Exploring the intricacies of human behavior can frequently be done by adapting the trivial and conventional intertemporal utility maximization models that economists insistently resort to, but to fully grasp such intricacies, a step forward is required. Agent-based models and other tools from complexity sciences constitute the analytical arsenal that is needed to improve our understanding of how behavioral issues attach to heterogeneity, local interaction, path-dependence, out-of-equilibrium dynamics and emergence.

Originality/value

Although surveys on behavioral economics and finance abound in the specialized literature, this study has the peculiarity of emphasizing five relevant topics that are particularly illustrative of the pivotal role of behavioral science in promoting the transition from the strict neoclassical perspective to a less mechanic and more organic view of economics and finance.

Details

Studies in Economics and Finance, vol. 40 no. 3
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 1 March 2001

K.G.B. Bakewell

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18;…

18596

Abstract

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management Volumes 8‐18; Structural Survey Volumes 8‐18.

Details

Structural Survey, vol. 19 no. 3
Type: Research Article
ISSN: 0263-080X

Article
Publication date: 1 September 2001

Index by subjects, compiled by K.G.B. Bakewell covering the following journals: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management…

14773

Abstract

Index by subjects, compiled by K.G.B. Bakewell covering the following journals: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management Volumes 8‐18; Structural Survey Volumes 8‐18.

Details

Facilities, vol. 19 no. 9
Type: Research Article
ISSN: 0263-2772

Article
Publication date: 1 March 2001

K.G.B. Bakewell

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18;…

14378

Abstract

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management Volumes 8‐18; Structural Survey Volumes 8‐18.

Details

Property Management, vol. 19 no. 3
Type: Research Article
ISSN: 0263-7472

Article
Publication date: 1 May 2001

K.G.B. Bakewell

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18;…

14155

Abstract

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management Volumes 8‐18; Structural Survey Volumes 8‐18.

Details

Journal of Property Investment & Finance, vol. 19 no. 5
Type: Research Article
ISSN: 1463-578X

Article
Publication date: 1 February 2006

Masudul Alam Choudhury

The paper aims to offer a new perspective on the strictly microeconomic nature of all of Islamic economics. Writers in this field continue to work in the mainstream tradition…

6154

Abstract

Purpose

The paper aims to offer a new perspective on the strictly microeconomic nature of all of Islamic economics. Writers in this field continue to work in the mainstream tradition without noticing the micro‐interface of the theoretical nature of Islamic economics. This paper aims to address this issue.

Design/methodology/approach

The paper provides a comparative study of received literature in the history of economic thought and contrasts the ethical foundations of Islamic economics from the mainstream dichotomy between microeconomic and macroeconomic parts.

Findings

There is a cogent microeconomic foundation of Islamic economics for the economy‐wide treatment of ethical economic issues and problems including the policy framework.

Research limitations/implications

This is a theoretical exploration. The empirical part is yet to be expanded upon.

Practical implications

The paper has practical implications for graduate students on policy formulation and economic theorizing, by making them analytically aware on the extensive relevance of microeconomics in the building block of ethical content of economic theory, policy and institutions.

Originality/value

The paper presents original thinking along lines of microeconomic foundations of macroeconomic theory from the social and ethical vantage points of Islamic economics and finance that writers in this field should not ignore. The paper is meant for serious students and academics of economic theory and ethical social policy embedded in the economic treatment.

Details

International Journal of Social Economics, vol. 33 no. 2
Type: Research Article
ISSN: 0306-8293

Keywords

Content available
Book part
Publication date: 29 December 2016

Abstract

Details

Risk Management in Emerging Markets
Type: Book
ISBN: 978-1-78635-451-8

Abstract

Details

Understanding the Investor: A Maltese Study of Risk and Behavior in Financial Investment Decisions
Type: Book
ISBN: 978-1-78973-705-9

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