ADAM SMITH: THE INVISIBLE HAND OR CONFIDENCE


Gache, Fernando Luis; Otero, Dino
Subsecretaría de Posgrado y Vinculación con la Investigación
Universidad Tecnológica Nacional – Facultad Regional Buenos Aires
Castro Barros 91 CP: C1178AAA
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SUMMARY

In 1776 Adam Smith raised the matter that an invisible hand was the one which moved the markets to obtain its efficiency. Despite in the present paper we are going to raise the hypothesis, that this invisible hand is in fact the confidence that each person feels when he is going to do business. That in addition it is unique, because it is different from the confidence of the others and that is a variable nonlinear that essentially is ligatured to respective personal histories. For that we are going to take as its bases the paper by Leopoldo Abadía (2009), with respect to the financial economy crisis that happened in 2007-2008, to evidence the form in which confidence operates. Therefore the contribution that we hope to do with this paper is to emphasize that, the level of confidence of the different actors, is the one which really moves the markets, (therefore the economy) and that the crisis of the subprime mortgages is a confidence crisis at world-wide level.

KEY WORDS: Confidence; Crisis; Adam Smith; Invisible hand.

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