John Kay: Polishing the Head of the Same Pin (2/5)

The video discusses the speaker's experience with the DSG rational expectations framework at Princeton, highlighting its insights into economic shocks. It critiques the over-reliance on economic models, emphasizing the need for diverse approaches. The limitations of these models during the financial crisis are examined, with a focus on assumptions that excluded key crisis elements. Robert Lucas's perspective on the predictability of economic crises is also discussed, questioning the exclusivity of certain economic theories.

What does the speaker suggest about the limitations of using a specific set of techniques in economic modeling?

What was Robert Lucas's reaction to the Queen's question regarding the predictability of financial crises?