Financial Bubbles

Hayes, Mark

doi:10.4337/9781847202802.00030

Financial Bubbles

Hayes, Mark

Authors

Mark Hayes

Contributors

Philip Arestis
Editor

Malcolm Sawyer
Editor

Abstract

The purpose of this chapter is to make the case for an alternative, Post Keynesian, perspective on a topic in financial economics of considerable research interest and policy relevance, namely the ‘financial bubble’. The evident tension between the two opening quotations, in their contrasting views of the nature and significance of bubbles, demands explanation. The source of their conflict is profound, and corresponds ultimately to different conceptions of the role of time in economic theory. This fault-line in economics was first identified by Keynes in The General Theory (1973 [1936], CWVII, hereafter GT in chapter and page references) and is also reflected in many of the other chapters of this book. This chapter is accordingly metatheoretical, in concentrating on this core difference between theoretical approaches; and also methodological, in examining what the difference means for the interpretation of the empirical evidence. The analysis leads in turn to a consideration of Keynes’s distinctive approach to policy on speculation.

Citation

Hayes, M. (2006). Financial Bubbles. In P. Arestis, & M. Sawyer (Eds.), A handbook of alternative monetary economics (420-437). Edward Elgar Publishing. https://doi.org/10.4337/9781847202802.00030

Online Publication Date	Jan 26, 2007
Publication Date	2006
Deposit Date	Mar 1, 2016
Publicly Available Date	Mar 1, 2016
Publisher	Edward Elgar Publishing
Pages	420-437
Book Title	A handbook of alternative monetary economics.
Chapter Number	25
ISBN	9781843769156
DOI	https://doi.org/10.4337/9781847202802.00030
Public URL	https://durham-repository.worktribe.com/output/1667581
Publisher URL	https://www.e-elgar.com/shop/a-handbook-of-alternative-monetary-economics?___website=uk_warehouse