Broken Recovery: Have Economists Failed Us

In an important new study, Olivier Blanchard, the Chief Economist at the International Monetary Fund (IMF), has just admitted that their having respected and accepted the advice of conservative economists has turned out to be a blunder.

Causes, Consequences and Prospects, edited by Richard Baldwin From Baldwin's introductory chapter:

Bill McBride at Calculated Risk has a great post up about the difficulty of recession forecasting.

By Cullen Roche: David Beckworth has an interesting piece up regarding the cause of the recession. He and the other market monetarists have long questioned whether the housing bubble actually caused the current recession. They have also stated that the idea of the balance sheet recession is “inadequate”.

The banking crisis that began in August 2007 shocked markets and precipitated the Great Recession. To fully explain the banking crisis, one must account for its timing, severity, and global impact.  For example, why didn’t a banking crisis erupt sooner—say, in the recession years of 1990-1991 or 2001-2002? What changed in recent years that led to business risk-taking capable of wrecking the U.S. housing market and the U.S.

A leading group of academic economists has adopted conflict-of-interest rules in response to criticism that the profession not only failed to predict the 2007-2008 financial crisis but may actually have helped create it.