Document Type

Book Review

Publication Date

Fall 2010

Abstract

Too Big to Fail by Andrew Ross Sorkin offers a meticulous re-telling of one of the most important periods in recent history. As regulators, bankers, lawyers, scholars, and other interested parties sift through the rubble in search of knowledge about the crash, Too Big to Fail serves both as a chronicle of the recent past and a cautionary tale for the immediate future. Acknowledging past missteps, uncovering root causes, and correcting systemic shortcomings to prevent similar failure is arguably the key economic and regulatory challenge of our time. Part I of this Essay summarizes key episodes of the financial crisis as covered by Too Big to Fail. Part II examines a potential explanation of the crisis unexplored in the book in light of the decline of neoclassical economic theory and the emergence of behavioral economic theory.

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