Predatory cells and puzzling financial crises: Are toxic products good for the financial markets?

Olivier Mesly, Imed Chkir and François-Éric Racicot ()

Economic Modelling, 2019, vol. 78, issue C, 11-31

Abstract: We advance the idea that the predator-prey dynamics that take place among key market agents play an important role in explaining financial crises. As such, we posit that financial markets evolve through fault lines involving toxic behaviors (such as deceit), toxic products (such as predatory mortgages) and inefficient regulations. We provide data to show that the puzzle of the lack of congruence between the market behaviors and what some economic models predict at times of financial crises may be the result of predator-prey interplays, and of so-called “predatory cells”, which are under the influence of financial accelerators.

Keywords: Bads and goods; Predatory-prey behavior; Financial crisis; Financial accelerator (search for similar items in EconPapers)
JEL-codes: G01 G41 (search for similar items in EconPapers)
Date: 2019
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Working Paper: Predatory cells and puzzling financial crises: Are toxic products good for the financial markets? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:78:y:2019:i:c:p:11-31

DOI: 10.1016/j.econmod.2018.09.010

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