What Should Be Taught About the Financial Crisis?

by Dave Schuler on October 27, 2011

John B. Taylor remarks:

If you think that it shows our economic theory—especially our macroeconomic theory—was wrong, and thereby gave the wrong policy prescriptions, then you have to think about massive changes. If you think the crisis shows that our economics was basically correct and that policy deviated from the recommendation of the theory, then you want to revise the text differently, and show with example after example how this happened. It is a unique teaching moment.

See especially his presentation for an upcoming economics teachers’ convention.

{ 4 comments… read them below or add one }

Steve Verdon October 27, 2011 at 10:39 am

The first link is to your cite Dave.

Dave Schuler October 27, 2011 at 11:21 am

Thanks. Fixed.

Ben Wolf October 27, 2011 at 3:25 pm

What should be taught is that neo-liberal economic theory has the dubious distinction of being entirely responsible for the mess. A school of thought which doesn’t acknowledge bubbles or involuntary unemployment, its adherents continue to make excuses for the failure of their models and are a classic case study in ideological blindness.

Steve Verdon October 27, 2011 at 5:07 pm

Which economists belong to that school of thought Ben?

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