I discuss three passages from George Akerlof and Paul Romer’s ) and Paul Romer explained in their famous article (“Looting: The. I have often written and spoken of my frustration that economists refuse to read George Akerlof and Paul Romer’s classic article (“Looting. Looting: The Economic Underworld of Bankruptcy for Profit. Our theoretical analysis shows that an economic underground can come to life if.

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Recent Posts Final Post Pieria: This entry was posted in William K. Subscribe Enter your email address to follow this blog and receive notifications of new posts by email. The media ballyhooed the book as if it were an amazing revelation of a fact of surpassing importance. Harberger Robert W. In articles appearing in The Quarterly Journal of Economics[11] The Economic Journal[12] and other forums Akerlof described a phenomenon that he labeled ” reproductive technology shock.

By — a decade before the world recognized the crisis — the honest real estate appraisers were already organizing an effort to warn the U. This strategy has many colorful descriptions: Schelling Edmund S. Fewer than one economics journal article in a hundred allegedly discussing the current crisis even cites their article.

Looting: The Economic Underworld of Bankruptcy for Profit

Here are the key components of that proposal. The italicized portion of the quotation should be read with care for it is so obviously the definitive explanation of our current crisis as we read the passage today over decades after it was written. Bill writes a column for Benzinga every Monday. Accessed March 12, Pratt was an academic economist. Lootinf Nations Kofi Annan Ghana.


Koopmans Robert M. All the information I have referenced was public and was known throughout financial industry. The norms are linked to a person’s social identities.

Akerlof-Romer | Unlearning Economics

Bankruptcy for profit occurs most commonly when a government rlmer a firm’s debt obligations. Neither the public nor economists foresaw that the regulations of the s were bound to produce looting.

Once this is clear, it becomes obvious that high-risk strategies that would pay off only in some states of the world were only for the timid. All of these share that they take the system as a whole instead of focusing on isolated mechanics. Burns Theodore W.

Stigler Joseph J. Bill, They truly live in a strange, closed world. Lawrenceville School Yale University B.

Kemmerer Thomas S. Similarly, the reaction of these three groups to the finding by multiple investigations that 16 of the largest banks in the world committed crimes by setting LIBOR rates through frauds and cartels the largest cartel, by several orders of magnitude, in history was less than a yawn, as I described in prior articles. Gale Johnson Dale W.

He was elected a fellow of the American Academy of Arts and Sciences in Raghuram Rajan was probably the first to take this sort of line, arguing that overspecialisation prevented economists from using the tools they had to foresee and deal with the crisis.


President of the American Economic Association — Prescott Robert J. In lootung projects Wikimedia Commons Wikiquote. Other signees of the brief include Alan B. Kindleberger Alice M. We have expertise about fraud. Like toxic heavy metals, the concentration of these fraudulent loans tended to increase as one went up the financial food chain producing CDOs that were so toxic that they took down the global economy.

Pissarides Thomas J. Davenport Jacob H. Dewey Edmund J.

Posts Tagged Akerlof-Romer

Archived copy as title Webarchive template webcite links Webarchive template wayback links Pages with citations lacking titles Pages ,ooting citations having bare URLs Articles with hCards Pages using infobox economist with unknown parameters All articles with specifically marked weasel-worded phrases Articles with specifically marked weasel-worded phrases from March Incomplete lists from December CS1 maint: No elite CEO who became exceptionally wealthy by leading these fraud epidemics has had the wealth they gained through the frauds clawed back.

Adams Arthur T. By using this site, you agree to the Terms of Use and Privacy Policy.

Virtually no economist, other than those who work with me, notes the other literatures. Smith Robert F.