INET users have been astutely engaged in discussion around our current big question: “Why did so many economists fail to predict the global financial crisis, and so many policymakers mishandle it - while some saw it all coming?”
In addition to the user responses to the question on our Q&A Forum, users have also been discussing it on by commenting on the main Question page, where some good ideas and resources are currently emerging.
Environmental scientist and INET user Charles Hall believes that the global economy is butting up against a threshold of limited resources, and that “real growth in the economy can occur only when there are expandable cheap energy and other resources to allow that, but those days are behind us.”
“Without that realization,” he says of the acknowledgement of the limited resources, “failure is nearly guaranteed.”
INET user Roman notes that it is the models which have failed, and that a new paradigm of “scientific strategic planning” must be implemented to overcome what are fundamentally cyclical crises: “Formulas, graphs and other available forms of scientism,” Roman writes, “serves only analytical purposes feeding cyclic (regarding the crisis) development.”
User Paulcottrell also points to a failure of economic models, referencing top economist and INET advisory board member Joe Stiglitz’s recent letter to the Financial Times, when he writes that “If the models are incomplete or the underlying theory is only a subset of a larger dynamic we must tread with caution, because the risks can be quite dangerous - not only metaphorically, but quite literally.”
In summation, Paulcottrell notes that a multidisciplinary approach may help develop a new paradigm: “It is when models and common sense are coupled do we actually get a glimpse of the larger reality. Long live the Jack Boot Economists!”
User Norberto E. García writes that the interaction of a variety of elements led to the crisis, and “As it usually happens when an airplane crashes, one factor alone can not explain the crash.”
Other INET users have weighed-in as well with a variety of intelligent and innovative responses. Read more in the comments section at the very bottom of the Question page. You can also add your own response, or rank those of other users.
Comments
RE:a multidisciplinary approach may help develop a new paradigm: “It is when models and common sense are coupled do we actually get a glimpse of the larger reality.
How About Ostrom's Nobel Winning (2009) Work? Right on the Money, I believe!
Post new comment