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Financial bubbles and their magic: asset price as a heroic journey in the financial markets

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Listed:
  • Alexandru (alec) BĂLĂŞESCU

    (Simon Fraser University, Vancouver (Canada); Royal Roads University, Victoria, B.C. (Canada))

  • Apurv Jain

    (Harvard Business School, Boston (USA))

Abstract

Why do financial crises appear unprecedented in spite of being a rather regular occurrence across countries and time? There are many answers from various schools of finance and economics, including Minsky’s financial instability hypothesis in which systemic stability endogenously results in instability. We explore the inclusion of observed human behavior in an endogenous framework by engaging with anthropological concepts such as myth, ritual and magic that structure and explain our behaviour, and by extending the concept of agency from human to non-human. We also point to the possibility of better understanding our position in the mythological cycle using the new social media data. The aim of the article is to offer a holistic framework of interpretation of causes and circumstances of economic crises, using the tools of economy, semiotics, and economic anthropology that would account for both the universality of these crises and for their particular occurrences that always seem unique.

Suggested Citation

  • Alexandru (alec) BĂLĂŞESCU & Apurv Jain, 2018. "Financial bubbles and their magic: asset price as a heroic journey in the financial markets," The Journal of Philosophical Economics, Bucharest Academy of Economic Studies, The Journal of Philosophical Economics, vol. 12(1), pages 1-35, November.
    • Handle: RePEc:bus:jphile:v:12:y:2018:i:1:n:1
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    References listed on IDEAS

    as
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    2. Weidenmier, Marc, 2010. "This Time is Different: Eight Centuries of Financial Folly. By Carmen Reinhart and Kenneth Rogoff. Princeton, NJ: Princeton University Press, 2009. $35.00," The Journal of Economic History, Cambridge University Press, vol. 70(3), pages 766-768, September.
    3. Callon, Michel, 2005. "Why virtualism paves the way to political impotence: A reply to Daniel Miller's critique of "The laws of the market"," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 6(2), pages 3-20.
    4. Atif Mian & Amir Sufi, 2009. "The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1449-1496.
    5. Hyman P. Minsky, 1992. "The Financial Instability Hypothesis," Economics Working Paper Archive wp_74, Levy Economics Institute.
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    More about this item

    Keywords

    Actor-Network-Theory; semiotics; agency; asset pricing; financial bubbles; Minsky;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises

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