The Financial Crisis in the UK: Uncertainty, Calculation and Error

Posted: 13 Jun 2011

Date Written: June 9, 2011

Abstract

This paper seeks to provide a distinctly Austrian interpretation of the financial crisis and subsequent recession that affected the UK economy in 2007-2010. In doing so it challenges the conventional wisdom that focuses on poorly aligned incentives, providing a theoretical and empirical claim for the primacy of ignorance explanations. Particular emphasis is given to the role of regime uncertainty and so-called “big players”, as well as how faulty behavioural foundations and “price naivety” misunderstand economic calculation and recalculation. Far from being an example of “market failure”, the financial crisis has revealed that almost a century on from the socialist calculation debate many economists still fail to understand the basic principles of a market economy.

Suggested Citation

Evans, Anthony J., The Financial Crisis in the UK: Uncertainty, Calculation and Error (June 9, 2011). Available at SSRN: https://ssrn.com/abstract=1861540 or http://dx.doi.org/10.2139/ssrn.1861540

Anthony J. Evans (Contact Author)

ESCP Business School ( email )

537 FINCHLEY ROAD
LONDON, NW37BG
United Kingdom

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