Neglected Risks, Financial Innovation, and Financial Fragility

By Richard D. Long. 2012

135 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/38a4fb81b8ce66160f5ff2e3655d01446e1aa5ec

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In Economics and Econometrics

Citations in the corpus

Psychology and the Financial Crisis of 2007-2008 (2011, background): “And the 2 See Akerlof and Shiller (2009) and Shefrin (2009) for more extensive psychology-based accounts of the crisis.”
Psychology-based Models of Asset Prices and Trading Volume (2018, background): “Aside from excess volatility and time-series predictability, the model also captures an idea emphasized by Marks (2011) and Gennaioli et al. (2012), namely that the risk of a crash is greatest following a long quiet period with no significant downturns: at such a moment, the availability heuristic…”
Benefits and Costs of Bank Capital (2016, unknown): “5 The hypothesis of investors’ preference for safe and liquid assets is also often used in the analysis of shadow banking; see Claessens and others (2013); Gennaioli, Shleifer, and Vishny (2012, 2013).”
Credit-Market Sentiment and the Business Cycle (2017, unknown): “To motivate this reduced-form assumption, they say: “[W]e can represent a Minsky moment as a fall in the debt limit . . ., which 8In Gennaioli, Shleifer, and Vishny (2012), infinitely risk-averse investors neglect the existence of a low-probability disaster state, which matters relatively more for…”
Neglected Risks: The Psychology of Financial Crises (2015, background): “…in a boom are too low, offering a foundation of “unanticipated” shocks, and of zero probabilities attached to some states of the world by investors ( Gennaioli, Shleifer, and Vishny 2012 . yields Our theory boom-bust financial crises based entirely on beliefs; we do not incorporate into the model…”