In last weekend’s New York Times magazine, Paul Krugman, winner of the 2008 Nobel Memorial Prize in Economic Science, wrote a long op-ed piece titled: How Did Economists Get It So Wrong?
Link: http://www.nytimes.com/2009/09/06/magaz ... -t.html?em
The article is quite interesting, but the main point that I took away from it seems to be that every Nobel Prizewinner in Economics for the last 20 years or so has been talking out their @$$ in a really major way, and yet most all of them still have prestigious, responsible and high-paying jobs. Fer cryin out loud! Doesn’t anybody think this kind’a taints the Nobel?!? Were there any second-placers who weren't just BS-ing with fancy terminology and equations?
Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy. During the golden years, financial economists came to believe that markets were inherently stable — indeed, that stocks and other assets were always priced just right. There was nothing in the prevailing models suggesting the possibility of the kind of collapse that happened last year. Meanwhile, macroeconomists were divided in their views. But the main division was between those who insisted that free-market economies never go astray and those who believed that economies may stray now and then but that any major deviations from the path of prosperity could and would be corrected by the all-powerful Fed. Neither side was prepared to cope with an economy that went off the rails despite the Fed’s best efforts.
The article is quite interesting, but the main point that I took away from it seems to be that every Nobel Prizewinner in Economics for the last 20 years or so has been talking out their @$$ in a really major way, and yet most all of them still have prestigious, responsible and high-paying jobs. Fer cryin out loud! Doesn’t anybody think this kind’a taints the Nobel?!? Were there any second-placers who weren't just BS-ing with fancy terminology and equations?
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