Sunday, May 8, 2016
The most recent crisis, however, has allowed critics to gain a hearing; new ideas—either more scientific, in that they are based on empirical data, or on the contrary, arguing that economics and finance should be placed back in the realm of the social sciences—are beginning to be discussed seriously.
As Professor Lo (2012) wrote:
The recent financial crisis has exposed some serious gaps in our understanding of the global economy, and the need to take stock and get our academic house in order has never been greater. This presents us with a precious opportunity to make wholesale changes to our discipline that would otherwise be impossible, so we should delay no longer. (p. 48)
Posted by MainandWall™ at 5:11 AM
In the aftermath of the 2007–09 financial crisis, mainstream finance theory was criticized for having failed to either forecast or help prevent the market crash, which resulted in large losses for investors. Although as of the writing of this book at the end of 2013, markets have recovered beyond precrisis levels, the investors enjoying the recovery are not always the same investors as those who suffered the losses. So, the crash caused permanent impairment of wealth in many cases.
Posted by MainandWall™ at 3:21 AM