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.

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