THE ROLE OF INFORMATION ASYMETRY IN THE OUTBURST AND THE DEEPENING OF THE CONTEMPORARY ECONOMIC CRISIS

An analysis of the outburst and deepening of the contemporary economic crisis that takes into account the information asymmetry is highly opportune. This point of view is strongly supported by the latter years’ developments regarding this theory, which may be able to explain the current evolutions of the economic and financial markets. Thus, the paper argues that adverse selection and moral hazard played a key role in the evolution of the contemporary economic crisis and that its routs can be detected away in history. In this regard, we analyze the situation prior to the outburst of the subprime crisis in the U.S. and how it developed in a context of asymmetry information, fueled by the government’s actions. Given the importance of certitude, quantity and quality of data and information and the way they are interpreted, it becomes crucial to isolate the role of information asymmetry. The paper shows that issues related to all these aspects are instruments of in-depth analysis that can explain the mechanisms of outburst, spread and, mostly, persistence for more than three years of the crisis.