CIAO DATE: 07/2009

Are financial markets embedded in economics rather than society? A critical review of the performativity thesis

June 2009

Danish Institute for International Studies

Abstract

This DIIS Working Paper reveals a number of biases among influential scholars in economic and financial sociology. It reviews an expanding literature which controversially contends that economic theories are self-fulfilling prophecies: economists build markets to fit their models. The key role of economists is thus redefined from analysts to social engineers and a focus is put on their social power within the economic and financial world, rather than on their ability to deliver neutral and exact descriptions and predictions of these worlds.

Resource link: Are financial markets embedded in economics rather than society? A critical review of the performativity thesis [PDF] - 496K