How Did Economists Get It So Wrong?

It’s hard to believe now, but not long ago economists were congratulating themselves over the success of their field. Those successes — or so they believed — were both theoretical and practical, leading to a golden era for the profession. On the theoretical side, they thought that they had resolved their internal disputes. Thus, in a 2008 paper titled “The State of Macro” (that is, macroeconomics, the study of big-picture issues like recessions), Olivier Blanchard of M.I.T., now the chief economist at the International Monetary Fund, declared that “the state of macro is good.” The battles of yesteryear, he said, were over, and there had been a “broad convergence of vision.” And in the real world, economists believed they had things under control: the “central problem of depression-prevention has been solved,” declared Robert Lucas of the University of Chicago in his 2003 presidential address to the American Economic Association. In 2004, Ben Bernanke, a former Princeton professor who is now the chairman of the Federal Reserve Board, celebrated the Great Moderation in economic performance over the previous two decades, which he attributed in part to improved economic policy making.

This article by Paul Krugman is quite interesting and well worth reading. Click to read the full story in the New York Times

Britishers bracing for tough times

Latest reports from London show more gloom is in store for Britishers as the Chancellor of the Exchequer, readies his red box to reveal tough measures to face what the IMF is expected to say are going to be even tougher times for the Queen's subjects ensuring more entertainment for customers of one restaurant in London.

CNN looks at G20 Coverage

The G20 Summit in London earlier this month was closely followed by huge audience around the world. There was hardly any doubt about the reason for the keen interest: Would the leaders of the top twenty economies in the world come up with answers to the unprecedented global economic crisis?

A programme aired by CNN looks at how the media geared themselves and covered the huge event.

International Correspondents hosted by CNN London Anchor Fionnuala Sweeney

Economic Slowdown Hits Below The Belt

Gone are the days when economic pundits lectured to us in language you and I didn't understand about fiscal policies and macroeconomic pressures. There was nothing we could do about it. We had to accept whatever they said, and hope that it was right. Those days are gone though.

Nowadays they are more serious about finding out whether anyone has got his knickers in a twist. The funny thing is, they're trying to prove the former Fed Chairman was right.

This is what the Huffington Post has to say.

Some like him.

Some don't.