Tag: CrisisManagement

The Financial Crisis and the Systemic Failure of Academic Economics. Lessons from the Financial Crisis: Causes, Consequences, and Our Economic Future

The authors note that the instability leading to crisis is assumed away by the models which assume inherent stability. Economists are confined to models of stable states that are perturbed by limited external shocks. Economists failed to incorporate the intrinsic recurrent boom-and-bust dynamics characteristic of a complex economic system. Consequently, ‘systemic crisis’ is treated as an ‘otherworldly event’ absent from theoretical frameworks.

Rate this: