Economists and the Crisis

As has been tracked by several previous posts on this blog, there is by now a considerable debate on what the crisis teaches us about the role of economists.

One dimension of this debate has focused on the failure by the economics profession to predict the onset of the crisis.  A second quasi-related dimension relates to the failure to sufficiently appreciate the instability of the pre-crisis financial system.  To some, these failures suggest that those economists who did not accurately predict the crisis should have no role in resolving the crisis and constructing the new post-crisis economic system.    This debate is playing out at the global level and also in relation to the domestic situation.

These are all big issues and I do not attempt to provide a comprehensive set of answers here. Nevertheless, it may be useful to make a few points.  I also mainly focus on the role of academic/research economists and the field of macroeconomics.

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