The paper uses Minsky's financial instability hypothesis as an analytical framework for understanding the subprime mortgage crisis and for introducing adequate reforms to restore economic stability. We argue that the subprime crisis has structural origins that extend far beyond the housing and...

Can investors with incorrect beliefs survive in financial markets and have a significant impact on asset prices? My paper addresses this issue by analyzing a dynamic general equilibrium model where some investors have rational expectations while others have incorrect beliefs concerning the mean...

Price bubbles remain a puzzle for economic theory, particularly given their appearance in experimental markets with high efficiency and minimized uncertainty and noise. We propose that bubbles are caused by the institutionalization of social norms, when individuals observe and adopt the behavior...

Innovations in payment systems are often framed as technological innovations that are exogenous to the institutions and dynamics of the payment system. This paper suggests that the main drivers of institutional change in the payment system are politico-economic factors and the demand of...

Paper compares two major schools of economic thought - neoclassical and evolutionary - from the perspective of keystone assumption: rationality of economic agents. It discusses role of rationality assumption in neoclassical and evolutionary theories; importance of expectations; and perspectives...

This article evaluates Herbert A. Simon's contribution to organization theory, placing special emphasis on the criterion of bounded rationality. Simon's criticism of the orthodox version of organizational bureaucracy is interpreted and his analysis is extended to institutional economics. One of...

This is the entry for quot;Evolutionary Psychologyquot; in the Encyclopedia of Law and Society: American and Global Perspectives. This entry provides a summary and overview of the science of evolutionary psychology and its implications for the study of law. Understanding how evolution has shaped...

This paper shows the links between Hume's philosophy of customs and the basic principles of institutional theory. This relationship has been suggested by contemporary economists such as Vernon Smith and others, who see in Hume the origins of today's broadly accepted dichotomy between...

Professors Knoedler and Underwood discuss the concern over the decline in the number of economic majors as well as overall the enrolments in economics. For many quot;mainstreamquot; economic educators this problem obey to the fact that academic economics tend to grant lower grades on average to...