The author thanks John Freebairn, Joe Isaac, Elias Khalil, Carsten Murawski, Richard Pomfret and Ross Williams for comments on an earlier draft.
The Global Financial Crisis and Behavioural Economics*
Article first published online: 16 DEC 2009
© 2009 The Economic Society of Australia
Economic Papers: A journal of applied economics and policy
Volume 28, Issue 3, pages 249–254, September 2009
How to Cite
McDonald, I. M. (2009), The Global Financial Crisis and Behavioural Economics. Economic Papers: A journal of applied economics and policy, 28: 249–254. doi: 10.1111/j.1759-3441.2009.00026.x
- Issue published online: 16 DEC 2009
- Article first published online: 16 DEC 2009
- behavioural economics;
- global financial crisis
Conventional economics, which is based on Homo economicus, cannot provide a satisfactory explanation for the global financial crisis. However, behavioural economics, and the concept of present bias, self-serving bias, ‘new era’ stories, money illusion, comparisons with reference levels and herding, can provide an explanation.