Jump to ContentJump to Main Navigation
The Empire of ValueA New Foundation for Economics$
Users without a subscription are not able to see the full content.

André Orléan

Print publication date: 2014

Print ISBN-13: 9780262026970

Published to MIT Press Scholarship Online: January 2015

DOI: 10.7551/mitpress/9780262026970.001.0001

Show Summary Details
Page of

PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2017. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use (for details see http://www.mitpress.universitypressscholarship.com/page/privacy-policy).date: 11 December 2017

The Crisis: 2007 to 2008

The Crisis: 2007 to 2008

Chapter:
(p.285) 9 The Crisis: 2007 to 2008
Source:
The Empire of Value
Author(s):

André Orléan

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262026970.003.0010

The bear-market dynamic set in motion by the fall in prices beginning in 2007 exhibited the same destabilizing behavior as the bull-market dynamic of the euphoric phase. The panic and its aftermath demonstrated once again that, when it comes to liquidity, there is no such thing as a self-regulating market. In explaining how euphoria gave way to panic, particular emphasis is laid on the perverse effects of financial competition. They arise from an inability to generate the countervailing forces that orthodox economic theory still imagines will inevitably and promptly work to correct imbalances. The fact that, no matter how far prices fall, no private or institutional investor comes forward to buy after panic sets in by itself refutes the efficient markets hypothesis. But there is in fact one other investor who will buy: the government. The financial system, in other words, must look outside itself for its own salvation.

Keywords:   bear-market dynamic, bull-market dynamic, efficient markets hypothesis, financial competition, financial system, liquidity, orthodox economic theory, self-regulating market

MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.