You may have missed Simon Potter’s publication on Friday “The Failure to Forecast the Great Recession.”
Potter is not merely a distant observer throwing stones; he is the Executive Vice President and Director of Economic Research of the Federal Reserve Bank of New York.
He breaks down the economists’ collective research failure into three categories:
1. Misunderstanding of the housing boom
2. A lack of analysis of the rapid growth of new forms of mortgage finance.
3. Insufficient weight given to the powerful adverse feedback loops between the financial system and the real economy.
The entire piece is in the Think Tank for your reading pleasure . . .