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

Posted: 13 Jun 2011  

Anthony J. Evans

ESCP Europe; ESCP Europe - Department of Economics

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 Europe ( email )

79 Avenue de la Republique
Paris, 75011
France

HOME PAGE: http://anthonyjevans.com

ESCP Europe - Department of Economics ( email )

United Kingdom

HOME PAGE: http://anthonyjevans.com

Paper statistics

Abstract Views
1,368