The global financial crisis: Essay on the possibility of substantive change in the discipline of finance

In this essay, we reflect on difficulties that may constrain the achievement of substantive change in areas of public policy. Our focus is the discipline of finance – as a field of practices and a field of research – in the aftermath of the Global Financial Crisis. Our exploratory analysis indicates difficulties in concretizing substantive change in both fields, although difficulties do not imply absolute inertia and structural inalterability. In particular, we found indications that, apart from a few exceptions, the core of finance research has largely failed to invest in the promotion of paradigmatic diversity, and continues to resist the idea. Yet, the stakes involved are significant, since finance's lack of diversity in research paradigms arguably translates into a body of knowledge that presents important limitations when trying to make sense of important phenomena, not least of which are infrequent but highly significant events unfolding in the political economy. Although we are aware of the underlying obstacles, we maintain that there is a need for finance academics to increase their commitment to research diversity and engage more thoroughly in the examination of finance in action. While the development of behavioral finance constitutes an interesting intellectual ramification, which allows the field to experiment in relaxing the assumption of investor rationality, a stronger engagement in diversifying knowledge, paradigmatically and methodologically, is needed for richer and grounded understandings of finance in action to concretize.