What is Law & Economics and How Could It Have Contributed to Preventing the Global Crisis?
What is Law & Economics and How Could It Have Contributed to Preventing the Global Crisis?

Summary/Abstract: Objective: The main goal of the article is to investigate the underpinnings and research apparatus of law & economics, as well as to expose its relevance to economists and lawyers in the context of the recent global financial crisis and preventing future crashes. Research Design & Methods: The research objective is met with the usage of the analysis of the primary material and theoretical inquiry. The article covers theoretical dimensions of the application of law & economics to the analysis of market problems, such as the global financial crisis. Findings: A crucial advantage of law & economics is its mix of research apparatus – economic and legal theory, as well as econometric and behavioural approaches. A detailed analysis of institutions shall enable more precise assessment of the outcome of market phenomena. The causes of the recent global financial crisis could have been addressed by research in law & economics. Popularisation of law & economics may contribute to preventing crises. Implications & Recommendations: A deep inquiry of market phenomena relies on interdisciplinary research. Applying legal-dogmatic research to formal institutions and combining it with empirical economic analysis could lead to better understanding of market issues, like crises. Contribution & Value Added: The article highlights the importance of law & economics for dealing with market failures. Its core value added is the popularisation of this interdisciplinary approach and description of possible applications.

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