The roles of financial asset market failure denial and the economic crisis: Reflections on accounting and financial theories and practices

Abstract

Throughout the world every economic and socio-economic indicator has deteriorated. The so-called 'real economy' has been deeply contaminated by the most significant global financial crisis for seven decades. The ultimate extent and duration of this rampant degeneration and its longer-term political effects are unpredictable but what caused the crisis? This paper examines a range of suppositions made in theories which deny the possibility of financial asset market failure and identifies ways in which they contributed to the circumstances and actions which created the current crisis.