Wharton School: Why Economists Failed
Comments (0)
For those of you following this line, the renowned Wharton School of Economics has published an article on Why Economists Failed to Predict the Financial Crisis. Apparently, “a sense that they missed the call has led to soul searching among many economists”. There’s also lots of talk about “mathematical models that failed” and “false security created by asset-pricing models”. Aha, so it’s not the economists’ fault, it’s the models’ fault! That goes to show you just how dangerous math can be! The Wharton article is pretty dry reading, so be forewarned. Even so, it’s not nearly as dry as a paper much of it is based on, called “The Financial Crisis and the Systemic Failure of Academic Economists”, which contains heart-warming phrases like “economics has been trapped in a sub-optimal equilibrium”. That probably means “we screwed up”.
