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There are several observations to be made from the number and variety of narratives that the authors in this review have proffered. The most obvious is that the
by roymurdock 11y ago
There are several observations to be made
from the number and variety of narratives
that the authors in this review have proffered.
The most obvious is that there is still significant
disagreement as to what the underlying
causes of the crisis were, and even less agreement
as to what to do about it. But what may
be more disconcerting for most economists
is the fact that we can’t even agree on all the
facts[...]Many of us like to think
of financial economics as a science, but complex
events like the financial crisis suggest
that this conceit may be more wishful thinking
than reality. Keynes had even greater
ambitions for economics when he wrote, “If
economists could manage to get themselves
thought of as humble, competent people on a
level with dentists, that would be splendid.”22
Instead, we’re now more likely to be thought
of as astrologers, making pronouncements
and predictions without any basis in fact or
empirical evidence.
I find it kind of sad that the author is more concerned with lamenting about what people think of him and his profession than he is preoccupied with synthesizing the most plausible set of causes and remedies for the financial crisis from the 21 different sources he has studied.
- muraiki 11y agoI think the point being made is that it's not straightforward to synthesize a plausible set of causes and remedies, despite the survey of 21 sources, and that economics as a science needs a bit of self-reflection in the light of this reality.
- roymurdock 11y agoThe author's main conclusion is that economists "need to collect, check, and accumulate facts from which more accurate inferences can then be drawn. Without the immutable hard platform of objective facts on which we can build an accurate narrative of the crisis that stands the test of time, there’s little hope for scientific progress as the waves of public opinion toss our perspective in one direction or another." I don't need a degree from Harvard and Yale, nor do I need to be a professor at MIT to tell you that. If I were an expert in Professor Lo's position, I would probably make a greater attempt to present my expert view of the events and my expert recommendations based off of the 22 texts that I have just read on the subject, rather than just saying that we should collect more data on everything so that this won't happen again in the future.
- Illotus 11y agoIf the data sucks, how are you going to present any other reasonable expert view than the one he presented? Manufacturing some grand view and recommendations based on untrustworthy data is something that needs to be avoided, however much we would want to hear it.
- roymurdock 11y agoI'd love to hear the opinion and recommendations of the guy who read 22 primary/secondary texts on the subject and have him help shape policy now. You're not going to get better data than the expert views and analyses presented in these texts, barring the constant surveillance, recording, and analysis of every transaction ever made within and without the US economy, every email sent within and between banks/regulators/credit rating agencies/mortgage brokers/loan originators, etc. - data that is impractical and currently illegal to collect. We'd all love to have more/better data, but that doesn't mean we shouldn't draw conclusions or act on the data that is available to us now.