Heterogeneous resources and the financial crisis

Rajshree Agarwal, Jay B. Barney, Nicolai J. Foss and Peter G. Klein have a new paper, "Heterogeneous Resources and the Financial Crisis: Implications of Strategic Management Theory", that discusses the financial crisis and the policy response to it from the perspective of strategic management theory that focuses on the heterogeneity of capital and labour resources within the firm. They discuss why the bailouts and other policy responses won't work due to them being at a too high a level of aggregation. There are a number of citations to the relevant Austrian literature. The abstract reads:

Macroeconomic theory assumes that factors of production in the economy are homogeneous and fungible. As a result, it is poorly suited for analyzing and developing policy responses to the recent financial crisis. Theories of strategic management and organization, with their emphasis on heterogeneous resources and capabilities, are better positioned. We provide examples of how macroeconomic theory may lead policies astray, and how theories of strategic management provide insight into the nature and causes of the financial crisis and the appropriate policy response.

(HT: Steve Horwitz)