Why Economists Failed to Predict the Financial Crisis
Dec 31, 2009
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By Knowledge@Wharton.com
A sense among many economists that they failed to see the financial crisis brewing led to soul searching this past year. While some warned that a bubble was forming in the housing sector, others admit to a widespread failure to predict the damage the bubble would cause when it burst. Other economists are even harsher. A paper published in May 2009 from a conference of economists calls for changes in the way they are trained.