The Study On Formation Mechanism Of The Financial Crisis Based On Evolutionary Paradigm

The economic recession caused by the U.S.financial crisis had become the most severe economic crisis since the 1930s "Great Depression".In 2009,the U.S.Financial Crisis Inquiry Commission published the "Financial Crisis Inquiry Report." It reported that personal and social responsibility should be considered.Lack of sensitive and inquiring mind to the economic condition,eventually led to uncontrolled systemic risk.In 2010,C.M Reinhart and K.S.Rogoff wrote "This is not the same:eight hundred years history of the financial crisis."The reasons for the financial crisis in the history were attributed to human nature,the greed and destructive driving force always break rational control after a period,energy would return to the relative peace and prosperity after the destructive release.This article started the research in the above background,trying to answer the question:What was the weakness of human nature led to the financial crisis?What was their intrinsic mechanism?How to intervene the weakness of human nature?It was found that the idea and method of evolutionary paradigm had been more suitable for the study of this problem.Evolutionary paradigm did not accurately predict it belonged to the fuzzy analysis;it rather focused on the establishment of an analytical framework of a scientific observation and understanding of the economic running logic.The thesis attempted building an more realistic analytical framework understanding the financial crisis,it would analyze the financial crisis and find ways to overcome the weaknesses of human nature according to this framework.Analyzing the financial crisis with the evolutionary paradigm is a meaningful attempt.The first chapter,financial crisis theory and literature review.Firstly,it concluded the representative theories of the financial crisis according to four types-the debt crisis,banking crisis,currency crisis and systemic financial crisis-and comment on its shortcomings.Secondly,it concluded the representative literature of the financial crisis at four angles of system level of financial markets-investors,financial tools,financial system and economic environment-and comment on its shortcomings.The second chapter,evolution paradigm and its useful of the formation theory of the financial crisis as reference.Firstly,it introduced the origin and development of evolutionary paradigm;Secondly,it introduces the main content of the evolutionary paradigm,including the basic hypothesis of evolution paradigm,main method and analysis framework;Finally,it analyzed the evolution paradigm was the beneficial supplement to the theory about the financial crisis formation On the behavior person hypothesis,as well as on the analysis framework and analysis method.The third chapter,the formation mechanism of the financial crisis:theory analysis on evolution paradigm.Firstly,it analyzed the genetic mechanism of the financial crisis,combined with the economic man hypothesis it indicated that the biological gene of economic and financial activities were decision model;combined with the dual system decision-making model it indicated that the realistic decision model of economic man was the dual system decision-making model,based on the double system decision-making model it further introduced that the biological gene of financial crisis was irrational decision model,combined with nelson and winter's thought it concluded that the social gene of financial crisis was irrational decision routine.Then,the thesis analyzed the variation mechanism of financial crisis,combined with nelson and winter thought it obtained that the variation mechanism of the financial crisis was innovation of irrational decision routine.Then it analyzed the selection mechanism of the financial crisis,it concluded that the selection mechanism of financial crisis was the prevalence of irrational decision routine.Finally it created the evolution model of formation of the financial crisis,the model both reflected that the decisive factors of the formation of the financial crisis was irrational decision routine,and reflected the mechanism of dynamic cycle of transformation between the various factors affecting the financial crisis form and evolution together,it deduced the evolution mechanism and evolution process of formation of financial market bubble and financial market collapse according to this model.The fourth chapter,the formation mechanism of the financial crisis:case analysis on evolution paradigm.This chapter selected "market failure","government failure" and "the double failure of market and the government" type of financial crisis,the purpose was not only to understand the formation of the financial crisis,and discussed how to solve the problem of the financial crisis.It analyzed the genetic mechanism,variation mechanism and selection mechanism of the above cases.The fifth chapter,the research conclusions and the countermeasure suggestions.Firstly,it summarized the evolution analysis of financial crisis,it concluded that the decisive factor for the formation of the financial crisis was irrational decision model,the biological characteristics of irrational decision model determined that the financial crisis was inevitable,irrational decision rountine was social performance of irrational decision model,irrational decision practices from the overstimulation of market environment,the different stimulating way of market environment derived different kinds of financial crisis,improving the stable economy and financial system was the best way to intervene financial crisis.Then,it put forward that attaching importance to the financial crisis early warning signal of certain decision-making,perfected the financial supervision system which balanced the market and the government,institutional solution about optimum combination of the market and government.The innovation of the thesis:firstly,the evolution analysis model of financial crisis was built on evolutionary paradigm,it reflected the mechanism of dynamic cycle of transformation between the various factors affecting the financial crisis form and evolution together;moreover,evolution analysis model with the dual system decision model as the logic starting point can integrated the new classical economics with "rational man" as the logical starting point and the nonmainstream economics with "bounded rationality" or "irrational" as the logical starting point.Secondly,it introduced the biological genetic mechanism of financial crisis based on the double system decision-making model,the irrational decision model,it was more scientific internal mechanism for the formation of the financial crisis;moreover,it introduced that financial crisis was inevitable based on the biological characteristics of irrational decision-making model,it help people correctly understand and treat financial crises.Thirdly,it put forward that adding warning signals of irrational decision and behavior in the financial activities,the institutional solution about optimum combination of binary regulation mechanism of the market and government,perfecting the financial supervision system which balanced the irrational decision and behavior of the market and government.