Rent-seeking: Difference between revisions

Economists such as [[Lord Turner of Ecchinswell|Lord Adair Turner]], the former chair of the British [[Financial Services Authority]], have argued that [[Financial innovation|innovation in the financial industry]] is often a form of rent-seeking.<ref>{{cite report |last=Turner |first=Adair |title= Securitisation, Shadow Banking and the Value of Financial Innovation |publisher=Johns Hopkins University |date=19 April 2012 |series=School of Advanced International Studies |issue=The Rostov Lecture on International Affairs |url= http://www.fsa.gov.uk/static/pubs/speeches/0419-at.pdf |archive-url= https://web.archive.org/web/20121003063000/http://www.fsa.gov.uk/static/pubs/speeches/slides-0419-at.pdf|archive-date=3 October 2012 }}</ref><ref>{{cite speech |last=Turner |first=Adair |title=What do banks do, what should they do and what public policies are needed to ensure best results for the real economy? |website= FSA.gov.uk| date=17 March 2010 |page=27 |url= http://www.fsa.gov.uk/pubs/speeches/at_17mar10.pdf |archive-url= https://web.archive.org/web/20101007114307/http://www.fsa.gov.uk/pubs/speeches/at_17mar10.pdf|archive-date=7 October 2010 }}[?]</ref>

 

Rent-seeking is not limited to any singular country or region. Rent-seeking manifests and impacts many different societies and economies.

 

 

Another example of rent-seeking can be found in the banking sector in Iceland. Leading up to the 2008 financial crisis, the Icelandic banks engaged in rent-seeking behavior by inflating asset prices, engaging in speculative investments and giving out large bonuses to executives. This eventually led to the collapse of Iceland's banking system and national economic crisis. <ref>{{cite journal |last=Zoega |first=Gylfi |year=2012 |title=Iceland's Collapse |journal=Journal of Economic Perspectives |volume=26 |issue=2 |pages=25–46 |doi=10.1257/jep.26.2.25 }}</ref>

 

==Development of theory==