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Keywords:

  • behavioural economics;
  • global financial crisis
  • D03;
  • E32;
  • G01

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.