Barry Eichengreen is a professor of Economics and Political Science at the University of California, Berkeley
Despite the similarities with the
Great Depression, the policy makers’ failure to tackle the Great Recession was
striking. What failures do you reckon as crucial in fundamental conceptual way?
Conceptually,
the Great Moderation led to the mistaken belief that the business cycle had
been tamed and additional risks could be safely taken. Efficient-markets theory provided a
convenient pretext for failure to address new risks created by financial innovation
and to adequately regulate the shadow banking system and securitization
markets. And then there was the tendency
for macroeconomists to forget as many lessons of the Great Depression as they
remembered.
How is it possible that the ideas of
Austrian School without supporting evidence in practice still dominate the macroeconomic
policy in Europe?
The answer,
I think, is that the Austrian School got it half right: Hayek, Mises and others
highlighted how credit booms and busts were intrinsic to the market
system. The histories of the 1920s and
2000s both bear them out. But they, or
at least some of their followers, then went on to endorse liquidationism as the
appropriate response to these problems, which is a logical nonsequitur.
What, if at all possible, will the
experience of the Great Recession change regarding economic thinking in the future?
The fact is
that economic thinking changes only very slowly. Senior professors of economics, with tenure,
are set in their ways. They’ve been at
it too long to change how they think even in the face of evidence incompatible
with their theories. Better to disregard
the evidence in that case, the thinking goes.
The field changes as students graduate and new scholars influenced by
the Great Recession, by historical evidence and by Big Data begin to repopulate
the field, making economics a more fundamentally empirical and historical
discipline. I see at least some signs
that this is beginning to happen.
Thank you very much.
Barry Eichengreen is Professor of
Economics at the University of California, Berkeley; Pitt Professor of American
History and Institutions at the University of Cambridge; and a former senior
policy adviser at the International Monetary Fund.
His current
book: Hall of Mirrors: The Great
Depression, The Great Recession and the Uses-and Misuses- of History, Oxford University Press, 2015.
Keine Kommentare:
Kommentar veröffentlichen