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Corresponding Author:
Cameron J. Gable, University of San Francisco, California, USA

Coauthors:
Shalendra Sharma, University of San Francisco, California, USA

Hedge Funds: A Political and Economic Analysis

Volume 70 - Issue 4, October 2017
(pp. 479-508)
JEL classification: G15, G21, F30, F38
Keywords: Alternative Investment Vehicles, Assets under Management (AUM), Capital Markets, Long-Term Capital Management, 2007-2009 Financial Crisis

Abstract

Hedge funds are indispensable to the modern day economy, but remain one of the most poorly understood instruments of financial globalization.  The financial crisis of 2007-2009 propagated fallacious interpretations of the role of hedge funds in precipitating the crisis.  In turn, this has led to unsubstantiated policymaking.  This paper seeks to clarify many of the misconceptions surrounding hedge funds and elucidate their rise to prominence.  It will be argued that the excessive regulation of hedge funds is unnecessary and ultimately detrimental to the global financial system.  Governments can prudently utilize hedge funds because they have the potential to reduce systemic risk and induce innovation.


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Institute for International Economics
of the Genoa Chamber of Commerce


Istituto di Economia Internazionale
Camera di Commercio di Genova
Via Garibaldi, 4 (III piano) - 16124 Genova (Italy)
www.ge.camcom.gov.it