SOAS Research Online

A Free Database of the Latest Research by SOAS Academics and PhD Students

[skip to content]

Driver, Ciaran (2023) 'Macroeconomics with Firms and Stockmarkets.' Contributions to Political Economy, 42 (1). pp. 117-127.

[img] Text - Accepted Version
Restricted to Repository staff only until 16 May 2025.

Request a copy

Abstract

Empirical work on stock market data, coupled with behavioural findings on corporate decision-making, have produced a set of challenges for orthodox macroeconomics. This paper critically considers the work of Andrew Smithers and related contributions, the insights from which have largely been ignored in consensus economics. Key features of this alternative framework are a rejection of efficient markets; a distinction between market and fundamental value of assets; the need to consider multiple financial assets; perverse effects of managerial compensation; the heterogeneity of economic actors; and behavioural theories of corporate decisions. The way that these facets are unified in a coherent critique marks Smithers out as an original thinker. But his work should also be seen in the context of past and contemporary authors who have attempted to incorporate firms and shareholders into economic theory. Despite the broad historical sweep of his work, Smithers has surprisingly little to say about political economy. Apart from references to executive compensation, his account does not differentiate much between the managerial capitalism and the era of shareholder value that has characterized major Anglophone countries since the 1980s. The result of this is that doubts remain over elements of his theory and that some policy implications are uncertain or unexplored.

Item Type: Journal Article
Keywords: Macroeconomics; Stockmarkets; Andrew Smithers; Economics of the Firm; Corporate Investment; Political Economy
SOAS Departments & Centres: Departments and Subunits > School of Finance & Management
ISSN: 02775921
DOI (Digital Object Identifier): https://doi.org/10.1093/cpe/bzad018
Date Deposited: 27 Jun 2023 09:43
URI: https://eprints.soas.ac.uk/id/eprint/39652
Related URLs: https://academi ... e4-f7017c7ed724 (Publisher URL)

Altmetric Data

Statistics

Download activity - last 12 monthsShow export options
Downloads since deposit
6 month trend
3Downloads
6 month trend
43Hits
Accesses by country - last 12 monthsShow export options
Accesses by referrer - last 12 monthsShow export options

Repository staff only

Edit Item Edit Item