There have been several efforts to rethink macroeconomics after the global financial crisis, which hardly any macroeconomists saw coming. The field’s reputation has not been helped by the protracted weak recovery (or worse: in continental Europe macroeconomic policymakers gratuitously provoked a second recession in 2011).
The most impressive post-crisis effort of rethinking how macroeconomics should be done, by many of the field’s top practitioners, has just been completed. It digs deeper than some earlier efforts we have commented on, and mines a richer seam as a result. In a series of posts this week, Free Lunch will cover the writings collected in the latest issue of the Oxford Review of Economic Policy. Devoted to the “Rebuilding macroeconomic theory project”, all the articles are free to view until February 7.
There nothing wrong with macroeconomics. The Financial Crisis was a combination of a weak economy and the pending melt down of Wall Street. Economists had their econometric models, but if one did not understand how banks betting their own capital would lead to an eventual unwind, and sink the global economy. Shock Exchange author Ralph Baker, has a keen understanding of economics and Wall Street. He also had the foresight and the backbone to predict the Financial Crisis and how Wall Street and poor government policies had been the culprits.
Martin Sandbu and the Financial Times continue to ignore Shock Exchange, and continue with these lies that no one predicted the Financial Crisis. What they really mean is no white person predicted the Financial Crisis. They refuse to give a black man his due. We thought the mainstream media in the U.S. was fake news.