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From Tulip Bulbs To Sub-Prime Mortgages. Analyzing The Sub-Prime Crisis: The Case For A Systemic Approach, Alan A. Stephens, J. Brian Atwater, Vijay R. Kannan

Management Faculty Publications

The collapse of the sub-prime mortgage market parallels several earlier failures within the financial services sector, begging the question why the lessons of past failures were not learned. Throughout history from the tulip bulb crisis of the 1600s to the most recent economic crisis, decision-makers keep making the same mistakes. This occurs in part because of a failure to recognize similarities between past and current events. This conceptual paper aims to use systems dynamics tools to examine the crisis and illustrate how seemingly independent events are linked. Design/methodology/approach: The paper provides a fundamental review of systems thinking concepts and uses …