Why Economists Failed to Predict the Financial Crisis

The video discusses the challenges in predicting economic crises due to the limitations of traditional economic methodologies, which often overlook outliers. It explores the role of identity and storytelling in economic decision-making, highlighting how personal narratives and social networks influence choices. The video also examines the impact of government policy on tobacco use, illustrating how strategic storytelling led to a decline in smoking rates. Finally, it touches on the introduction and gradual acceptance of radical ideas in economics, such as identity economics, which offer a more expansive view of the field.

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