Daily Archives: June 13, 2013

By William K. Black

Roger Myerson has recently updated an article on his purported mechanism for explaining why our supposedly efficient markets are producing growing crises.

A MODEL OF MORAL-HAZARD CREDIT CYCLES (March 2010, revised September 2012) 

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By William K. Black
(Cross posted at Benzinga.com)

In my first article on the Nobel Laureate Roger Myerson’s failed policies that helped make finance so criminogenic that it drove the ongoing financial crisis I began the exploration of Myerson’s claim that plutocrats constituted the unique advantage of capitalism over a system that forbade privately-owned firms.  Myerson calls a system that forbids privately-owned firms “socialism.”  He asserts that plutocrats demonstrate the accuracy of Friedrich von Hayek’s assertion of the inherent advantage of “capitalism.”  My first article used Myerson’s Prize lecture to explore why his methodology, theories, and recommended policies failed so spectacularly.  This article expands on that theme by citing other work by Myerson.

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