Bank Of England Chief Economist-To-Be Warns:

[Carl]

.

Bank Of England Chief Economist-To-Be Warns: "It's Time To Rethink Everything" (http://www.zerohedge.com/news/2014-04-24/bank-england-chief-economist-be-warns-its-time-rethink-everything)

Submitted by Tyler Durden on 04/24/2014 17:47 -0400


Andrew Haldane, who is well known among readers as being one of the most outspoken and truthy central bankers in the world, will become Bank of England's Chief Economist in June. That fact is what makes his comments - however factually honest - extremely uncomfortable for the Keynesian status quo DSGE modelers alive and well in every central bank in the world. To summarize his thoughts in the following letter - the models are useless and it's time to rethink everything...


Via Andrew Haldane,

In the light of the financial crisis, those [macro and micro model] foundations no longer look so secure. Unbridled competition, in the financial sector and elsewhere, was shown not to have served wider society well. Greed, taken to excess, was found to have been bad. The Invisible Hand could, if pushed too far, prove malign and malevolent, contributing to the biggest loss of global incomes and output since the 1930s. The pursuit of self-interest, by individual firms and by individuals within these firms, has left society poorer.

...

The crisis has also laid bare the latent inadequacies of economic models with unique stationary equilibria and rational expectations. These models have failed to make sense of the sorts of extreme macro-economic events, such as crises, recessions and depressions, which matter most to society. The expectations of agents, when push came to shove, proved to be anything but rational, instead driven by the fear of the herd or the unknown.

The economy in crisis behaved more like slime descending a warehouse wall than Newton’s pendulum, its motion more organic than harmonic.

...we are a co-operative species every bit as much as a competitive one. This is hardly a surprising conclusion for sociologists and anthropologists. But for economists it turns the world on its head.

...

In this light, it is time to rethink some of the basic building blocks of economics.

Full report below...

Economics Education and Unlearning (http://www.zerohedge.com/news/2014-04-24/bank-england-chief-economist-be-warns-its-time-rethink-everything)

[Carl]

Excerpt from the "Economics Education and Unlearning"

Section 4: Responding to arguments against change

We already teach Marx and Keynes, both of whom provide different ways of doing economics Our critics have attempted to caricature our society
as demanding “more Keynes and Marx”. However, our argument is far broader : we are calling for an evidence based, pluralistic economics education.

We can use the treatment of Marx and Keynes in the syllabus to demonstrate that the way that thinkers are taught is just as important as their presence. Marx is the subject of a presentation done in first year by BEconSci students though each student is assigned a different economist so only one group will actually study Marx. He is also present on the history of thought course. The key point is that any reference to Marx is compartmentalised from the economic theory proper and his contribution is judged to be historical and now superseded (he is given some time in developmental economics modules though these are the exception). We argue that it would be far more valuable to use Marx’s theories of crisis, exploitation, class struggle and the reserve army of unemployed as a lens through which to understand business cycles, income distribution and the labour market. For example, pedagogically useful comparisons can be made between Marx’s argument that Capitalism needs a certain level of unemployment to operate and the Non-Accelerating Inflation Rate of Unemployment (NAIRU) which suggests something similar but takes a very different normative perspective.

[Cebu_4_2]

Andrew Haldane may not be around very long.

[Santa]

Greed, taken to excess, was found to have been bad.
Wow! Amazing deduction, Sherlock. :mad:

[Ares]

Andrew Haldane may not be around very long.

Quote from Zerohedge....



In other news, Andrew Haldane threw himself off an 80 story building while shooting himself in the back of the head with a 10 guage shotgun.

Police have ruled out foul play.

Well if he winds up dead from self inflicted nail gun wounds to the head and torso........... :rolleyes:

[mick silver]

i like the guys who use nail guns to kill there selfs ,,,,,,,,, what a joke

[Cebu_4_2]

i like the guys who use nail guns to kill there selfs ,,,,,,,,, what a joke

I met a guy that accidentally drove a framing nail into his knee, I doubt he would have done that twice.