Please use this identifier to cite or link to this item:
Appears in Collections:Economics Journal Articles
Title: Policy in the wake of the banking crisis: Taking pluralism seriously
Author(s): Dow, Sheila
Contact Email:
Keywords: pluralism
monetary policy
bank regulation
Issue Date: 2012
Citation: Dow S (2012) Policy in the wake of the banking crisis: Taking pluralism seriously, International Review of Applied Economics, 26 (2), pp. 161-175.
Abstract: This paper explores a pluralist approach to policy with respect to the financial system in the wake of the crisis. We consider first what is involved in a pluralist approach to policy more generally, and how this may be justified. This includes a pluralist stance with respect to different approaches to economic theory, pluralism in the sense of interdisciplinary enquiry, pluralism in terms of the range of methods employed, and pluralism with respect to recognition of the plurality of culture and values in society. Implications are drawn for how the banking crisis is framed, how it is explained by theory and thus how policy is designed. In addressing these issues, current mainstream theory focuses on a narrow definition of rational behaviour which, within competitive markets, generates a socially-optimal outcome. This approach is governed by a mathematical formalist methodology, and encourages policy to incentivise this kind of rational behaviour, with respect, for example, to inflation targeting and addressing moral hazard. Pluralist theory would instead recognise the socio-psychological and institutional/evolutionary foundations of money and banking, such that policy needs to focus on rebuilding confidence and addressing moral (including distributional) issues. The relevant analysis would require a range of methods and would address pluralities within society.
DOI Link:
Rights: This is an Accepted Manuscript of an article published by Taylor & Francis Group in International Review of Applied Economics on 01/03/2012, available online:

Files in This Item:
File Description SizeFormat 
2011 cambridge pluralism final.pdf128.84 kBAdobe PDFView/Open

This item is protected by original copyright

Items in the Repository are protected by copyright, with all rights reserved, unless otherwise indicated.

If you believe that any material held in STORRE infringes copyright, please contact providing details and we will remove the Work from public display in STORRE and investigate your claim.