Behind the 2008 Capital Market Collapse

C-Rene Dominique ()

No EERI_RP_2008_17, EERI Research Paper Series from Economics and Econometrics Research Institute (EERI)

Abstract: Greed and the unethical behavior of financial institutions obviously played a part in the collapse of the world capital market in 2008. But, this paper argues that the main culprits are the neo-liberal ideology (requiring ever smaller gov-ernments and privatization) and the flawed theories of risk assessment. It also finds that given the fact that market economies are fractal structures, the objective assessment and / or the quantification of risks is not even possible. It concludes with some recommendations as to how to avoid future collapses.

Keywords: Efficiency and self-correction in market economies; Linear-positive and non-linear modelings; creative destruction of coefficients; determinism and randomness, and risk assessment. (search for similar items in EconPapers)
JEL-codes: E22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-fmk, nep-mac and nep-pke
Date: 2008-10-26
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Persistent link: http://EconPapers.repec.org/RePEc:eei:rpaper:eeri_rp_2008_17

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