LSE's De Grauwe: Markets Move From Paralyzed to Overshot

The video discusses the challenges of evaluating market risks, particularly political risks, and the uncertainty in economic forecasting. It highlights the difficulty in predicting market reactions due to political events in Europe and the US, and compares the current situation to the financial crisis. The discussion also covers the limitations of economic models in incorporating political risks and the uncertainty surrounding economic policies and their impact on GDP estimates.

In what ways does the speaker suggest that current market conditions are different from past crises?

What is the significance of Frank Knight's theories in the context of the current economic situation?