The big, bad wolf and the rational market: portfolio insurance, the 1987 crash and the performativity of economics

  title={The big, bad wolf and the rational market: portfolio insurance, the 1987 crash and the performativity of economics},
  author={Donald MacKenzie},
  journal={Economy and Society},
  pages={303 - 334}
  • D. MacKenzie
  • Published 1 August 2004
  • Economics
  • Economy and Society
This article distinguishes two meanings of the performativity of economics, a thesis advanced by Michel Callon: ‘generic’ performativity, according to which markets and other economic relations are not to be taken as given, but as performed by economic practices; and ‘Austinian’ performativity, in which economics brings into being the relationships it describes. The two versions of performativity are explored by means of an examination of the history of portfolio insurance (a financial-market… 
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The thesis that economics is “performative” (Callon 1998) has provoked much interest but also some puzzlement and not a little confusion. The purpose of this article is to examine from the viewpoint
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  • 2017
The issue of performativity concerns the claim that economics shape rather than merely describe the social world. This idea took hold following a paper by Donald MacKenzie and Yuval Millo entitled
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