FROM HOMO-ECONOMICUS TO RISK INTEGRATION: A NEW PARADIGM FOR FINANCIAL CRISIS CYCLES

Abstract

This paper analyzes the impact of financial crises on societies and questions the traditional economic models that are based on growth, profitability, cost-efficiency, and sustainability. The author argues that the economic theories of the past and the legitimations of regulatory interventionism by States are unable to prevent, understand or manage financial crises, which have become more intense and complex over the last two decades. The paper explores the integration of risk factors at both macroeconomic and microeconomic levels and identifies the criteria and risk factors that need to be integrated to achieve this aim. Characterizing risk through the complexity approach under the prism of systemic risk, the document argues that integrating risk factors is essential for establishing a new economic model that accounts for risk and yields a better understanding of financial crisis cycles. The paper concludes by proposing the adoption of "complex thinking" to understand, analyze, and extract the essence of the ongoing crises in our societies