Open Access. Powered by Scholars. Published by Universities.®

Business Law, Public Responsibility, and Ethics Commons

Open Access. Powered by Scholars. Published by Universities.®

Articles 1 - 2 of 2

Full-Text Articles in Business Law, Public Responsibility, and Ethics

Origins And Resolution Of Financial Crises: Lessons From The Current And Northern European Crises, Finn Ostrup, Lars Oxelheim, Clas Wihlborg Oct 2009

Origins And Resolution Of Financial Crises: Lessons From The Current And Northern European Crises, Finn Ostrup, Lars Oxelheim, Clas Wihlborg

Business Faculty Articles and Research

Since July 2007, the world economy has experienced a severe financial crisis that originated in the U.S. housing market. Subsequently, the crisis has spread to financial sectors in European and Asian economies and led to a severe worldwide recession. The existing literature on financial crises rarely distinguishes between factors that create the original strain on the financial sector and factors that explain why these strains lead to system-wide contagion and a possible credit crunch. Most of the literature on financial crises refers to factors that cause an original disruption in the financial system. We argue that a financial crisis with …


Social Insurance, Commitment, And The Origin Of Law: Interest Bans In Early Christianity, Jared Rubin Jan 2009

Social Insurance, Commitment, And The Origin Of Law: Interest Bans In Early Christianity, Jared Rubin

Economics Faculty Articles and Research

Despite the historical importance of ideology-based, economically inhibitive laws, we know little about the economic factors underlying their origin. This paper accounts for the historical emergence of one such law: the Christian ban on taking interest--a doctrine that shaped the evolution of numerous financial contracts and related organizational forms. A game-theoretic analysis and historical evidence suggest that the Church's commitment to providing social insurance for its poorest constituents encouraged risky borrowing, which the Church attempted to limit by banning interest. The analysis highlights the applicability of the rational choice framework to seemingly irrational actions and laws, the role of nonmonetary …