(Bloomberg View) -- There’s no question that mainstream academic macroeconomics failed pretty spectacularly in 2008. It didn’t just fail to predict the crisis -- most models, including Nobel Prize-winning ones, didn't even admit the possibility of a crisis. The vast majority of theories didn’t even include a financial sector.
And in the deep, long recession that followed, mainstream macro theory failed to give policymakers any consistent guidance as to how to respond -- some models recommended fiscal stimulus, some favored forward guidance by the central bank, and others said there was simply nothing at all to be done.
Register or login for access to this item and much more
All Information Management content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access