The Financial Crisis and the Systemic Failure of Academic Economics

David Colander; Hans Föllmer; Armin Haas; Michael Goldberg; Katarina Juselius; Alan Kirman; Thomas Lux; Birgitte Sloth

The Financial Crisis and the Systemic Failure of Academic Economics

David Colander, Hans Föllmer, Armin Haas, Michael Goldberg, Katarina Juselius, Alan Kirman, Thomas Lux, Birgitte Sloth

Økonomisk Institut

1890 Downloads (Pure)

Abstract

The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession's focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models.

Originalsprog	Engelsk
Udgiver	Department of Economics, University of Copenhagen
Antal sider	14
Status	Udgivet - 2009

Emneord

Det Samfundsvidenskabelige Fakultet

Adgang til dokumentet

DP 09-03Forlagets udgivne version, 243 KB

Citationsformater

@techreport{12f669600c9611de8478000ea68e967b,

title = "The Financial Crisis and the Systemic Failure of Academic Economics",

abstract = "The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession's focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models.",

keywords = "Faculty of Social Sciences, academic moral hazard, ethic responsibility of researchers",

author = "David Colander and Hans F{\"o}llmer and Armin Haas and Michael Goldberg and Katarina Juselius and Alan Kirman and Thomas Lux and Birgitte Sloth",

year = "2009",

language = "English",

publisher = "Department of Economics, University of Copenhagen",

address = "Denmark",

type = "WorkingPaper",

institution = "Department of Economics, University of Copenhagen",

}

TY - UNPB

T1 - The Financial Crisis and the Systemic Failure of Academic Economics

AU - Colander, David

AU - Föllmer, Hans

AU - Haas, Armin

AU - Goldberg, Michael

AU - Juselius, Katarina

AU - Kirman, Alan

AU - Lux, Thomas

AU - Sloth, Birgitte

PY - 2009

Y1 - 2009

N2 - The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession's focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models.

AB - The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession's focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models.

KW - Faculty of Social Sciences

KW - academic moral hazard

KW - ethic responsibility of researchers

M3 - Working paper

BT - The Financial Crisis and the Systemic Failure of Academic Economics

PB - Department of Economics, University of Copenhagen

ER -

The Financial Crisis and the Systemic Failure of Academic Economics

Abstract

Emneord

Adgang til dokumentet

Fingeraftryk

Citationsformater