The Global Financial Crisis and Its Aftermath

A.G. (Tassos) Malliaris is currently Professor of Economics and Finance and holds the Walter F. Mullady Sr. Chair in Business Administration at Loyola University Chicago. He specializes in financial economics and has made several contributions in the area of futures markets, options markets and risk management. He is President of the Athenian Policy Forum and Past-President of the Multinational Finance Society and the North American Economic and Finance Association. He has served as a member of boards of directors or investments committees in several organizations and is editor or associate editor in five journals.Leslie Shaw has an MBA and PhD in Behavioral Economics from the University of Chicago. After her PhD she completed five years of Post Doctoral work and graduated from the Chicago Institute for Psychoanalysis with a special interest in integrating theoretical psychoanalysis with the cognitive theoretical approaches that are foundational to Behavioral Economics. Prior to her doctoral work at the University of Chicago she spent several years in a variety of project management positions for one of the large international management-consulting firms. This valuable traditional MBA consulting experience provided her with a pragmatic business acumen in her study of the fallible aspects of judgment and decision processes within organizations. Leslie has been an invited speaker at a variety of business occasions and professional psychological conferences.Hersh Shefrin is the Mario L. Belotti Professor of Finance at Santa Clara University. He has published widely on a wide range of topics in mathematics, finance, and economics and is best known for his work in behavioral finance. A 2003 article in the American Economic Review includes him in the top 15 economic theorists to have influenced empirical work. His work is known for several firsts: an economic theory of self-control featuring a formal system 1/system 2 model, a behavioral explanation for the dividend puzzle, the disposition effect, behavioral portfolio theory, behavioral corporate finance, and behavioral pricing kernel theory.

This (book) provides evidence that while such collapses are avoidable, our understanding of behavioural decision making suggests that similar mistakes will be made in the future. Economics graduate students will find this stimulating and insightful... Recommended.

• I. INTRODUCTION 1. The Global Financial Crisis of 2007-09: An Overview of Neglected Ideas from Economics, Psychology, and Values A.G. Malliaris, Leslie Shaw, and Hersh Shefrin II. THE GLOBAL FINANCIAL CRISIS OF 2007-09 AND ECONOMICS2. From Asset Price Bubbles to Liquidity TrapsA.G. Malliaris 3. A Minsky Meltdown: Lessons for Central BankersJanet Yellen 4. Modeling Financial InstabilitySteve Keen 5. Assessing the Contribution of Hyman Minsky's Perspective to Our Understanding of Economic InstabilityHersh Shefrin 6. The Great Recession of 2008-09 and Its Impact on UnemploymentJohn Silvia 7. Mathematical Definition, Mapping, and Detection of (Anti)FragilityNassim Taleb and Rafael Douady III. THE GLOBAL FINANCIAL CRISIS OF 2007-09 AND PSYCHOLOGY 8. The Varieties of Incentive ExperienceRobert Kolb 9. Goals and the Organization of Choice Under Risk in Both the Long Run and the Short RunLola Lopes 10. Topology of Greed and FearGraciela Chichilnisky 11. A Sustainable Understanding of Instability in Minds and in MarketsLeslie Shaw 12. Existence of Monopoly in the Stock Market: A Model of Information-Based ManipulationViktoria Dalko, Lawrence R. Klein, S. Prakash Sethi, and Michael Wang 13. Crisis of AuthorityWerner DeBondt 14. Social Structure, Power, and Financial FraudBrooke Harrington IV. THE GLOBAL FINANCIAL CRISIS OF 2007-09 AND VALUES 15. Economics, Self Psychology, and Ethics: Why Modern Economic Persons Cheat and How Self Psychology Can Provide the Basis for a Trustworthy Economic WorldJohn Riker 16. Finance Professionals in the Market for StatusMeir Statman 17. Why Risk Management Failed: Ethical and Behavioral ExplanationsJohn Boatright 18. The Global Financial Crisis and Social Justice: The Crisis Seen Through the Lens of Catholic Social DoctrinePaul Fitzgerald, S.J. 19. The Moral Benefits of Financial Crises: A Virtue Ethics PerspectiveJohn Dobson 20. Three Ethical Dimensions of the Financial CrisisAntonio Argandonan V. EPILOGUE 21. Lessons for Future Financial StabilityA.G. Malliaris, Leslie Shaw, and Hersh Shefrin