The Phantom Economy   /   Summer 2010   /    The Phantom Economy

A Bibliographic Review of the Financial Crisis, 2007–2009

Madeline Chiavini, Colleen Kelly, and Matthew Panhans

The current financial crisis opened the floodgates for anyone with access to the internet to give their account of the events and root causes of the meltdown. Many interested and affected listeners have become overwhelmed with the jargon of bubbles, structured investment vehicles, interest rates, sub-prime lending, and exotic financial instruments like collateralized debt obligations (CDOs). Finding themselves hopelessly lost and intellectually hamstrung, many resort to simplifying the economic disaster to a moral crisis populated with crooked bankers, corrupt politicians, and inept citizens. This bibliographic review navigates the extensive literature on the economic crisis by focusing on three major classes of culprits: government, finance, and economics. The accounts emphasizing the role of the government encompass popular Left and Right malefactors, focusing on either a lack of deregulation or over-regulation, respectively, as the primary cause of the crisis. The financial sector has also received a fair share of the blame, including accounts of predatory lending, securitization, and the complication of financial instruments. Finally, those who view the crisis as a failure of intellectual frameworks blame economists for misleading the populace in pursuit of elegant mathematics. The history of economics has been a battle of ideas, and it is unclear that the best ideas have been the winners.

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