Why the Economic Crisis Was Not Anticipated

Autor/in	Posner, Richard A.
Titel	Why the Economic Crisis Was Not Anticipated
Quelle	In: Chronicle of Higher Education, 55 (2009) 32, (1 Seiten) PDF als Volltext Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	0009-5982
Schlagwörter	Stellungnahme; Economic Climate; Audits (Verification); Economic Impact; Economic Development; Readiness; Finance Reform; Macroeconomics; Real Estate; Housing; Etiology + Suchen Sie Ihr Suchwort? Wirtschaftslage; Ökonomische Determinanten; Wirtschaftsentwicklung; Financial reform; Finanzreform; Makroökonomie; Grundstück; Unterkunft; Ätiologie
Abstract	An article in the October 11 "New York Times" attributed the almost universal failure to anticipate the current economic crisis to "insanity"--more precisely, to a psychological inability to give proper weight to past events, so that if there is prosperity today people assume that it will last forever, even though they know that in the past booms have always been followed by busts. Experts on the business cycle, such as Federal Reserve Chairman Ben Bernanke, are not confined to basing predictions on naive extrapolation. So why did he and other experts, inside and outside of government, neglect warning signs of a coming crash? The warnings were disregarded because of preconceptions, the cost and difficulty of taking effective defensive measures against an uncertain danger, and the absence of a mechanism for aggregating, sifting, and analyzing warning information flowing in from many sources and for pushing it up to the decision-making level of government. A focus of reform, therefore, should be the creation of a centralized, unitary financial-intelligence apparatus in government that would have complete and continuous access to the books of all financial institutions. This sounds simple but the details would be complex, and in the author's view consideration of all nonemergency reform measures should be deferred until the current economic emergency ends, or at least until the recovery has begun. Until then, it is important that the financial sector be spared additional uncertainty concerning its regulatory environment--uncertainty that would exacerbate the tendency of the banks and other financial intermediaries to freeze and hoard in the present unsettled economic conditions--and that the designers of reform not be distracted by the urgencies of responding to the current crisis. (ERIC).
Anmerkungen	Chronicle of Higher Education. 1255 23rd Street NW Suite 700, Washington, DC 20037. Tel: 800-728-2803; e-mail: circulation@chronicle.com; Web site: http://chronicle.com/
Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2017/4/10