{"id":22499,"date":"2017-01-13T16:13:29","date_gmt":"2017-01-13T21:13:29","guid":{"rendered":"http:\/\/olduvai.ca\/?p=22499"},"modified":"2017-01-13T16:13:29","modified_gmt":"2017-01-13T21:13:29","slug":"economic-crises-and-the-crisis-of-economics","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=22499","title":{"rendered":"Economic Crises and the Crisis of Economics"},"content":{"rendered":"
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Economic Crises and the Crisis of Economics<\/a><\/h3>\n<\/header>\n
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LONDON \u2013 Is the economics profession \u201cin crisis\u201d? Many policymakers, such as Andy Haldane, the Bank of England\u2019s chief economist,\u00a0believe that it is<\/a>. Indeed, a decade ago, economists failed to see a massive storm on the horizon, until it culminated in the most destructive global financial crisis in nearly 80 years. More recently, they misjudged the immediate impact that the United Kingdom\u2019s Brexit vote would have on its economy.<\/p>\n

Of course, the post-Brexit forecasts may not be entirely wrong, but only if we look at the long-term impact of the Brexit vote. True, some economists expected the UK economy to collapse during the post-referendum panic, whereas economic activity proved to be rather resilient, with GDP growth reaching some 2.1% in 2016. But now that British Prime Minister Theresa May has implied that she prefers a \u201chard\u201d Brexit, a gloomy long-term prognosis is probably correct.<\/p>\n

Unfortunately, economists\u2019 responsibility for the 2008 global financial crisis and the subsequent recession extends beyond forecasting mistakes. Many lent intellectual support to the excesses that precipitated it, and to the policy mistakes \u2013 particularly insistence on fiscal austerity and disregard for widening inequalities \u2013 that followed it.<\/div>\n

Some economists have been led astray by intellectual arrogance: the belief that they can always explain real-world complexity. Others have become entangled in methodological issues \u2013 \u201cmistaking beauty for truth,\u201d as Paul Krugman\u00a0once observed<\/a>\u00a0\u2013 or have placed too much faith in human rationality and market efficiency.<\/p>\n

Despite its aspiration to the certainty of the natural sciences, economics is, and will remain, a social science. Economists systematically study objects that are embedded in wider social and political structures. Their method is based on observations, from which they discern patterns and infer other patterns and behaviors; but they can never attain the predictive success of, say, chemistry or physics.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Economic Crises and the Crisis of Economics LONDON \u2013 Is the economics profession \u201cin crisis\u201d? Many policymakers, such as Andy Haldane, the Bank of England\u2019s chief economist,\u00a0believe that it is. Indeed, a decade ago, economists failed to see a massive storm on the horizon, until it culminated in the most destructive global financial crisis in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[10044,56,5582,180,14682,13852,2080],"class_list":["post-22499","post","type-post","status-publish","format-standard","hentry","category-economics","tag-andy-haldane","tag-bank-of-england","tag-brexit","tag-crises","tag-crisis-of-economics","tag-economic-crises","tag-united-kingdom"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22499","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=22499"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22499\/revisions"}],"predecessor-version":[{"id":22500,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22499\/revisions\/22500"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=22499"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=22499"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=22499"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}