The role of trust in the 2008 financial crisis

The role of trust in the 2008 financial crisis Financial transactions require trust. This paper analyzes the role of trust in the context of the 2008 financial crisis. In order to find a role for trust, we need to find a role for trust in a standard economic model which differs from the rational expectation of the equilibrium outcome. It is argued that trust dropped dramatically in the Fall of 2008. The consequences and effects of this drop in trust are discussed. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Review of Austrian Economics Springer Journals

The role of trust in the 2008 financial crisis

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Publisher
Springer US
Copyright
Copyright © 2011 by Springer Science+Business Media, LLC
Subject
Economics; Public Finance; Political Science; History of Economic Thought/Methodology
ISSN
0889-3047
eISSN
1573-7128
D.O.I.
10.1007/s11138-010-0134-0
Publisher site
See Article on Publisher Site

Abstract

Financial transactions require trust. This paper analyzes the role of trust in the context of the 2008 financial crisis. In order to find a role for trust, we need to find a role for trust in a standard economic model which differs from the rational expectation of the equilibrium outcome. It is argued that trust dropped dramatically in the Fall of 2008. The consequences and effects of this drop in trust are discussed.

Journal

The Review of Austrian EconomicsSpringer Journals

Published: Mar 30, 2011

References

  • Trust, reciprocity and social history
    Berg, J; Dickhaut, J; McCabe, K

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