z***c
发帖数: 2959 | 1 BERKELEY – The most interesting moment at a recent conference held in
Bretton Woods, New Hampshire – site of the 1945 conference that created
today’s global economic architecture – came when Financial Times columnist
Martin Wolf quizzed former United States Treasury Secretary Larry Summers,
President Barack Obama’s ex-assistant for economic policy. "[Doesn’t] what
has happened in the past few years,” Wolf asked, “simply suggest that [
academic] economists did not understand what was going on?”
Here is the most interesting part of Summers’ long answer: “There is a lot
in [Walter] Bagehot that is about the crisis we just went through. There is
more in [Hyman] Minsky, and perhaps more still in [Charles] Kindleberger.”
That may sound obscure to a non-economist, but it was a devastating
indictment.
Bagehot (1826-1877) was a mid-nineteenth-century editor of The Economist who
published a book about financial markets, Lombard Street, in 1873. Summers
is certainly right: there is an awful lot in Lombard Street that is about
the crisis from which we are now recovering.
Minsky (1919-1996) is best approached not through his collected essays,
entitled Can “It” Happen Again?, but rather through the use Kindleberger (
1910-2003) made of his work in his 1978 book Manias, Panics, and Crashes: A
History of Financial Crises. Asked to name where to turn to understand what
was going on in 2008, Summers cited three dead men, a book written 33 years
ago, and another written the century before last.
Summers then enlarged his answer to include living economists: “Eichengreen
, Akerlof, Shiller, many, many others.” He talked about “the revolution in
finance as it was realized that asset prices show large volatility that
does not reflect anything about fundamentals,” but added that “
macroeconomics [did not] keep up with [this] revolution.” As a result, “to
the great detriment of contemporary macroeconomics,” his fellow economists
did not understand asset prices, manias, panics, and liquidity.
For Summers, the problem is that there is so much that is “distracting,
confusing, and problem-denying in…the first year course in most PhD
programs.” As a result, even though “economics knows a fair amount,” it
“has forgotten a fair amount that is relevant, and it has been distracted
by an enormous amount.”
I think that Summers’ judgments are fair and correct. And I count myself
among those who had forgotten and been distracted, even though I have always
assigned Lombard Street to my economic history courses and Manias, Panics,
and Crashes to my macroeconomics classes, and have always paid close and
respectful attention to Eichengreen, Akerlof, and Shiller.
But I was shocked by how large a panic was produced by what seemed to me –
and still does – relatively small losses (in terms of the size of the
global economy) in subprime mortgages; by the weakness of risk controls at
the major highly-leveraged banks; by how deep the decline in demand was; by
how ineffective the market’s equilibrium-restoring forces have been at
rebalancing labor-market supply and demand; and by how much core-country
governments have been able to borrow to support demand without triggering
any run-up in interest rates.
It is the scale of the catastrophe that astonishes me. But what astonishes
me even more is the apparent failure of academic economics to take steps to
prepare itself for the future. “We need to change our hiring patterns,” I
expected to hear economics departments around the world say in the wake of
the crisis.
The fact is that we need fewer efficient-markets theorists and more people
who work on microstructure, limits to arbitrage, and cognitive biases. We
need fewer equilibrium business-cycle theorists and more old-fashioned
Keynesians and monetarists. We need more monetary historians and historians
of economic thought and fewer model-builders. We need more Eichengreens,
Shillers, Akerlofs, Reinharts, and Rogoffs – not to mention a Kindleberger,
Minsky, or Bagehot.
Yet that is not what economics departments are saying nowadays.
Perhaps I am missing what is really going on. Perhaps economics departments
are reorienting themselves after the Great Recession in a way similar to how
they reoriented themselves in a monetarist direction after the inflation of
the 1970’s. But if I am missing some big change that is taking place, I
would like somebody to show it to me.
Perhaps academic economics departments will lose mindshare and influence to
others – from business schools and public-policy programs to political
science, psychology, and sociology departments. As university chancellors
and students demand relevance and utility, perhaps these colleagues will
take over teaching how the economy works and leave academic economists in a
rump discipline that merely teaches the theory of logical choice.
Or perhaps economics will remain a discipline that forgets most of what it
once knew and allows itself to be continually distracted, confused, and in
denial. If that were that to happen, we would all be worse off.
J. Bradford DeLong, a former assistant secretary of the US Treasury, is
Professor of Economics at the University of California at Berkeley and a
research associate at the National Bureau for Economic Research. | m*********2
发帖数: 701 | 2 huh?
LOL
created
columnist
Summers,
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lot
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Kindleberger.”
【在 z***c 的大作中提到】
: BERKELEY – The most interesting moment at a recent conference held in
: Bretton Woods, New Hampshire – site of the 1945 conference that created
: today’s global economic architecture – came when Financial Times columnist
: Martin Wolf quizzed former United States Treasury Secretary Larry Summers,
: President Barack Obama’s ex-assistant for economic policy. "[Doesn’t] what
: has happened in the past few years,” Wolf asked, “simply suggest that [
: academic] economists did not understand what was going on?”
: Here is the most interesting part of Summers’ long answer: “There is a lot
: in [Walter] Bagehot that is about the crisis we just went through. There is
: more in [Hyman] Minsky, and perhaps more still in [Charles] Kindleberger.”
| c*********3
发帖数: 6862 | 3 what exactly the guy is suggesting the academic economists to do? |
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