The path of least resistance lures us with the promise of an easy ride; but where does it take us?


I consider myself as a versatile financial economist, a disciple of the opulent and diverse tradition of classical political economy and a fervent advocate of broader and more critical conceptions of rigorous economic theorising. What I consider as the important and socially valuable imprint of my research work departs from the dominant group in contemporary economics that confines itself to a largely asocial and ahistorical mathematical modelling. The eminent German physicist Albert Einstein wrote that “perfection of means and confusion of goals seem to characterize our age”.

Despite its deep methodological flaws and half-baked intellectual foundations, the dominant paradigm (since the 1960s) of economics and (since the early 1980s) economic policy itself, solely driven by strong priors on its form/purpose and the mathematical necessity that a pure logical system entails, offered a pseudo-positivist demarcation criterion about what is acceptable as scientific economic theory and what is not: a priori micro foundations equals “theory”; all competing accounts of institutional, social and historical aspects in economics are synonymous to “story telling”. As a result, the intellectual cabal of neoliberalism and neoclassical thinking embarked in an ideological cleansing of mainstream economics from its multi facet heritage and holistic alternatives and rendered economics, outside the self-referential professional circuits, into a dismal science.

There is a dire cost in being shut down to publish in the highly rated mainstream economic journals when one objects to the pseudo-methodological pogrom that editors and referees have unleashed in the last couple of decades to a priori curtail scholarly pluralism. I am content that I did never bow to the stranglehold of such an odious academic monoculture.

I believe in what the scientist Rosalind Franklin wrote “you have to endeavour to tackle in your research long and difficult problems rather than merely publishing as many as possible, at best clever papers.”

I completed my Doctorate in the roaring nineties when precarious, as the ensuing Great Recession proved, euphemisms like the “Nice”, or even bolder, “the Fabulous Decade”, “Goldilocks Economy” and the “Great Moderation” were recited by the neoliberal consensus. Still, I was sceptical as to whether the standard economic paradigm of the “holy trinity” of GDP growth, inflation and unemployment management suffices as a snapshot of a rich economy’s well functioning. In contrast with the neoliberal mainstream technocracy, I felt that inequality is the missing vital fourth statistic.

The shocks of the interwar years, including the two World Wars and the Great Depression, gave the illusion that issues of capital accumulation and concentration had been solved. In contrast, Thomas Piketty in his Capital in the Twenty-First Century treatise, writes that the data indicate that in the past 30 years the incomes of the wealthiest have surged into the stratosphere (and the higher up in the income hierarchy one is, the greater the increase has been), while the incomes of the large majority have stagnated. This had led to a level of inequality in wealth in the developed world not seen since the eve of the Great Depression. This much is without dispute.  Where there is dispute, he emphasizes, is in trying to explain just why the rise in inequality has taken place, whether and to what degree it will continue in the future and, even more importantly, whether it is justified.

My research attempts to explain the why’s and the how’s behind the soaring inequality. Through my original work with Dr Marika Karanassou on Warrant Economics and, very recently on Warrant’s Neoliberalism with Dr Roberto Bande and Dr Hector Sala as well, I have addressed the structural and systemic flaws of modern capitalism that paved the way to the Great Recession.  I have elaborated on the anatomy and the apparatuses of the neoliberal, highly-globalised, monopoly/finance mode of resource allocation and price utility. My main argument is that the global fields of a dysfunctional market system have mushroomed into what I called “Warrant Economics for the Free-Market Aristocracy”, a power structure of insiders’ capitalism. I reflected upon the deep-seated reasons that Warrant Economics has unfolded in two symbiotic tenets: (i) the systemic creation and preservation of inequality and business concentration via Call-Put Policy Options, and (ii) the systemic exploitation of inequality via novel and toxic forms of financial engineering and securitisation.

In co-authored work with Dr Marika Karanassou, Professor Menelaos Karanasos and Dr Hector Sala, I have reflected on the flawed neoliberal economics of the Eurozone as a whole and the genesis and unfolding of the Greek crisis. I have argued against austerianism (mainly targeting the poor and middle classes, fringe groups of a society, the disabled and the elderly) and have written about the precise details of a viable implementation of a parallel currency (without exiting the Eurozone) in troubled member states as a temporary pressure mechanism to halt the tearing of the social fabric.

Together with Dr Marika Karanassou, I have recently developed the Fiscal Inequality Coefficient (FIC), a novel and holistic index, which measures the true progressivity of a given income (and wealth) tax system.  I did suggest that the incumbent progressive taxation schemes applied to the wealthiest individuals in advanced economies should be steepened to make the richest echelons of the income and wealth distributions pay a fairer and higher tax.  My initial findings, co-authored also with Dr Hector Sala, were covered by Larry Elliott, Economics Editor at The Guardian, who run a full page story  which was shared by more than 60,000 times online and was subsequently reproduced in major news outlets including MSN and Yahoo Finance. The research was also brought to the attention of parliamentarians in the UK including the Chancellor, Shadow Chancellor, the Chair of the Treasury Select Committee and its members and the members of the All-Party Groups on Taxation and Responsible Taxation.

In my work with my former PhD student Dr Spyros Mesomeris, on the returns generating process and the profitability of trading rules in emerging capital markets, I presented robust results that cast serious doubts on the weak form of the efficient markets hypothesis, one of the cornerstones of neoclassical finance.

I have also written, predominantly with my former PhD students, about convexity adjustment for constant maturity swaps in a multi-curve interest rate framework (with Dr Nikos Karouzakis) , integrated credit and market risk measurement of interest rate swap portfolios (with Dr George Petropoulos), dynamic modelling of credit risk (with Dr Yang Liu),  stochastic evaluation of credit spreads (with Dr Hugh Patience), two-factor valuation of convertible bonds (with Dr Ana Bermudez), yield curve modelling and corporate bond pricing  (with Dr George Bezerianos).