gold_medal wrote on Jan 4
th, 2013 at 2:43pm:
perceptions_now wrote on Jan 4
th, 2013 at 1:45pm:
freediver wrote on Jan 4
th, 2013 at 1:25pm:
It is mainstream economics pansi. It was on the front pages of the newspaper, before it happened.
Really?
Are you saying that the bulk of mainstream Economists called the GFC, before it started?
And, the Queen?
it was discussed all around the world for some time as soon as the sub-prime market collapsed. your memory is short - almost goldfish-like.
The Queen yesterday called the global financial crisis "awful" - and asked why nobody had seen it coming.
The Queen, 82, was opening a £71million building at the London School of Economics.
LSE's Professor Luis Garicano told her: "At every stage, someone was relying on somebody else and everyone thought they were doing the right thing."
http://www.mirror.co.uk/news/uk-news/queen-asks-why-nobody-saw-the-financial-355...=====================
Financial Crisis Blinders
Why Did So Many Economists Fail to Predict the Global Financial Crisis, and So Many Policymakers Mishandle It - While Some Saw It All Coming?
Economists by and large either failed to anticipate the global financial crisis that began in 2008, or greatly underestimated its severity. What about the economics field led policymakers and practitioners to fail so spectacularly? Will the same problems get in the way again and so undermine the recovery, or worse, lead to a repeat disaster? Or are there alternative theories to analyze the situation and avoid the problems next time?
In a now famous letter in response to a question by Queen Elizabeth, economists in England explained why no one foresaw the timing, extent and severity of the credit crisis by laying responsibility on the “failure of the collective imagination of many bright people.”
How did the economics profession come to be so complacent about the possibility of such a crash? Could it be the increasing belief over the last 30 years in the self-equilibrating properties of financial markets?
There were economists who did see the crisis coming and were very vocal about it at the time. More prominent (and celebrated) examples include people such as Robert Shiller, Nouriel Roubini and Raghuram Rajan.
http://ineteconomics.org/financial-crisis-blinders==============================