Blanchard, O. (2014) “Where danger lurks“, International Monetary Fund, Finance and Development, Σεπτέμβριος.
The recent financial crisis has taught us to pay attention to dark corners, where the economy can malfunction badly
Until the 2008 global financial crisis, mainstream U.S. macroeconomics had taken an increasingly benign view of economic fluctuations in output and employment. The crisis has made it clear that this view was wrong and that there is a need for a deep reassessment.
The benign view reflected both factors internal to economics and an external economic environment that for years seemed indeed increasingly benign.
Start with internal factors. The techniques we use affect our thinking in deep and not always conscious ways. This was very much the case in macroeconomics in the decades preceding the crisis. The techniques were best suited to a worldview in which economic fluctuations occurred but were regular, and essentially self correcting. The problem is that we came to believe that this was indeed the way the world worked.
To understand how that view emerged, one has to go back to the so-called rational expectations revolution of the 1970s. The core idea—that the behavior of people and firms depends not only on current economic conditions but on what they expect will happen in the future—was not new. What was new was the development of techniques to solve models under the assumption that people and firms did the best they could in assessing the future. (A glimpse into why this was technically hard: current decisions by people and firms depend on their whole expected future. But their whole expected future itself depends in part on current decisions.)
Σχετικές αναρτήσεις:
- Zartaloudis, S. (2014) “The financial crisis has badly damaged the Greek and Portuguese welfare states“, LSE EUROPP, 23 Σεπτεμβρίου.
- Thoma, M. (2014) “Can New Economic Thinking Solve the Next Crisis?“, The Fiscal Times, 16 Σεπτεμβρίου.
- Bertarelli, S., Censolo, R. & Colombo, C. (2014) “Fiscal Convergence in the European Union before the Crisis“, Contemporary Economic Policy, Volume 32, Issue 4, σσ. 784–801, Οκτώβριος 2014.