“No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models

Dirk J Bezemer

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents evidence that accounting (or flow-of-fund) macroeconomic models helped anticipate the credit crisis and economic recession. Equilibrium models ubiquitous in mainstream policy and research did not. This study identifies core differences, traces their intellectual pedigrees, and includes case studies of both types of models. It so provides constructive recommendations on revising methods of financial stability assessment. Overall, the paper is a plea for research into the link between accounting concepts and practices and macro economic outcomes.

Keywords: credit crisis; recession; prediction; macroeconomics; flow of funds; financialization; neoclassical economics; accounting research (search for similar items in EconPapers)
JEL-codes: C53 E37 E44 E47 (search for similar items in EconPapers)
Date: 2009-06-16
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Citations: View citations in EconPapers (48)

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