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Economists Behaving Badly, Redux
Where does this mistrust come from? Well, let me give you an example: Jackson Hole, 2005, a conference dedicated to celebrating the record of, ahem, Alan Greenspan. Raghuram Rajan had presented a paper warning that the risks of financial instability were much higher than most people were acknowledging. (I think Rajan has been wrong on many issues since then, but that was certainly a prophetic paper). And the response, in general, took the form of ridicule.

The principal discussant was Don Kohn (pdf), who was (barely) polite but completely wrong-headed, celebrating financial innovations such as "the growing ease of housing equity extraction":

Leading off on the rest of the discussion (pdf) was Larry Summers, who wasn't polite, dismissing Rajan for being "slightly Luddite" in questioning the value of financial innovation, which he compared (in a really bad analogy) to technological progress in transportation.



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Aug 1st, 2013 at 11:35:36 AM EST

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