Abstract

http://ssrn.com/abstract=2021675
 
 

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Endogenous Crisis and the Economic Paradigm


Wilson N. Sy


Investment Analytics

February 24, 2012

Real-World Economics Review, Issue 59, pp. 67-82, March 12, 2012

Abstract:     
This paper proposes that the global financial and economic crisis has a single cause underlying all other causes. The single cause is attributed to the economic paradigm which drives individual behaviour, business, government and education. We define the economic paradigm and explain its power to drive endogenous economic processes, ultimately leading to the course of events which is recognised as the crisis. The paradigm assumes that economic instabilities are exogenous events thus allowing governments to ignore processes with systemic risks which emerged from excessive debt and asset bubbles. We suggest that the solution to this and future crises requires a new economic paradigm, where understanding endogenous crisis is one of its central objectives. Economic theory without crises is like medical theory without diseases.

Number of Pages in PDF File: 16

Keywords: endogenous, crisis, instability, cause, paradigm

JEL Classification: A2, B4, D5, D8, E1, G1, H1, P1

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Date posted: March 15, 2012  

Suggested Citation

Sy, Wilson N., Endogenous Crisis and the Economic Paradigm (February 24, 2012). Real-World Economics Review, Issue 59, pp. 67-82, March 12, 2012. Available at SSRN: http://ssrn.com/abstract=2021675

Contact Information

Wilson N. Sy (Contact Author)
Investment Analytics ( email )
12 Gilchrist Place
Balmain East, NSW 2041
Australia
0424669802 (Phone)
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