The Banking Crisis - A Rational Interpretation

A. Patrick L. Minford

No E2009/10, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: Modern macroeconomic models have been widely criticised as relying too much on rationality and market efficiency. However, basically their predictions about this crisis are being borne out by events. 'Crashes' are an integral part of an 'efficient market' capitalism and are brought on by swings in the news about productivity growth; this time nearly two decades of strong computer-based productivity growth were brought to a crashing halt by raw material shortages. This presages a slow recovery until innovation in material use frees growth up again as it did in the 1990s after the shortages of the 1970s.

Keywords: Macroeconomic models; Banking Crisis (search for similar items in EconPapers)
JEL-codes: E0 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-fdg, nep-fmk and nep-mac
Date: 2009-07
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Persistent link: http://EconPapers.repec.org/RePEc:cdf:wpaper:2009/10

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