Document Type

Conference Proceeding

Peer Reviewed


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In the midst of the Great Depression, John Maynard Keynes wrote that many decisions where the full effects will not be known for some time “can only be taken as the result of animal spirits,” which Keynes defined as “a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.” One possible manifestation of this type of behavior might very well be the phenomenon which has become known, metaphorically, as a “bubble.” What role, if any, has the presence of asset market bubbles played in the current cycle of global financial turbulence? What kind of insights from Christian reflection might be brought to bear on the discussion over possible institutional, regulatory, and educational responses that would be intended to reduce the likelihood of a repeat performance in the future?

The debate over the causes of the global financial crisis and recession, including the role of global asset bubbles in this process, will no doubt continue for years to come. Policy and regulatory errors tell part of the story, but fallen human beings are also prone to the sin of greed. This is not a new phenomenon, and it is quite unlikely to disappear on this side of the full realization of the Kingdom of God. Perhaps the greatest contribution that Christian economists can make in these times is to point the way towards a more humble and prudential direction for the future of the financial sector, so that the consequences of our mistakes might be less severe.


Prepared for the Association of Christian Economists 25th Anniversary Conference, Baylor University, Waco, Texas, April 17, 2009. Panel topic: The 2008 Financial Crisis: An Assessment by Christian Economists.