I discuss three passages from George Akerlof and Paul Romer’s ) and Paul Romer explained in their famous article (“Looting: The. I have often written and spoken of my frustration that economists refuse to read George Akerlof and Paul Romer’s classic article (“Looting. Looting: The Economic Underworld of Bankruptcy for Profit. Our theoretical analysis shows that an economic underground can come to life if.

Author: Teshura Vujas
Country: Andorra
Language: English (Spanish)
Genre: Software
Published (Last): 17 July 2012
Pages: 483
PDF File Size: 5.97 Mb
ePub File Size: 8.40 Mb
ISBN: 751-8-47397-221-2
Downloads: 81166
Price: Free* [*Free Regsitration Required]
Uploader: Maukinos

EconPapers: Looting: The Economic Underworld of Bankruptcy for Profit

Becker Robert Eisner Joseph A. Retrieved June 28, Schultze Charles P. Join 1, other followers. Akerlof and Romer are among the rare economists to think closely about lootinf the officers controlling a fraudulent lender would embrace terrible loan documentation and making loans largely to borrowers who rkmer far less likely to repay. Gale Johnson Dale W. The Economic Underworld of Bankruptcy for Profit “, describing how under certain conditions, owners of corporations will decide it is more profitable for them personally to ‘loot’ the company and ‘extract value’ from it instead of trying to make it grow and prosper.

But the craziest economists are the ones who cite Akerlof and Romer — and ignore them.

And even if individual rmer are not in control of policy, key economists have substantial influence, not to mention the theories and ideas in economics as a whole. Koopmans Robert M. Dunbar John B. It all starts with understanding underwriting and why honest lenders try to do it superbly and why the officers controlling fraudulent lenders deliberately do it so pathetically.


Other promising areas include network theoryevolutionary economics and Agent-Based Modelling.

United Nations Kofi Annan Ghana. This entry was posted in William K.

Jenks Simon N. The second concept that needs to be understood is the critical role of underwriting documentation. Prescott Robert J. Gardner Herbert J.

Posts Tagged Akerlof-Romer

Namaimo February 3, at 9: Fetter David Kinley John H. DOJ has not convicted, clawed back, or even forced the resignation of any non -elite CEO for leading these any of these three frauds.

Neoclassical lootlng theoclassical economists continue to ignore Akerlof and Romer and competent regulators and white-collar criminologists. At that point most of my classmates dispersed among different New England prep schools. I will not provide the supporting data and sources. Quality Uncertainty and the Market Mechanism”, published in Quarterly Journal of Economics inin which he identified certain severe problems that afflict markets characterized by asymmetric informationthe paper for which he was awarded the Nobel Memorial Prize.

Taussig Jeremiah W. Klein Romef Marschak Tjalling C. Davenport Jacob H. The industry demonized the book and Lewis. Other signees of the brief include Alan B. Hoover Simon Kuznets John D. Sims Alvin E. Schultz Paul A.


Copeland George W. Seligman Frank W.

George Akerlof – Wikipedia

Certainly, a number of economic models exist for understanding things like panics, liquidity problems and moral hazard. Quality Uncertainty and the Market Mechanism”.

Thus the regulators in the field who understood what was happening from the beginning found lukewarm support, at best, for their cause. But my same showing has implicitly demonstrated that the officers controlling the financial institutions that purchased the endemically fraudulent loans were also engaged in fraud. In akerlpf presidential address to the American Economic AssociationAkerlof proposed natural norms that decision makers have for how they roer behave, and showed how such norms can explain discrepancies between theory and observed facts about the macroeconomy.

Akerlof proposed a new agenda for macroeconomics, using social norms to explain macroeconomic behavior. No honest lender would inflate an appraisal or permit an appraisal to be inflated. Bya repeat akerloff, found that percentage rose to 90 percent.