- Summary of Claims in Quoted Material from First Class[Note these claims may be slightly oversimplified at times and are selective but they

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Summary of Claims in Quoted Material from First Class (1/13/09) [Note: these claims may be slightly oversimplified at times, and are selective, but they probably are a reasonable approximation to the perspectives and points being made by the various authors.] De Grauwe (in Financial Times, July 23, 2008) (1) Credit crisis destroys “myth” of guaranteed efficiency of capital markets under low regulation and reliance on informed rationality of private-sector (2) Clear need for more regulation, not less (but not necessarily government control, which may make things worse) (3) Credit crisis destroys “myth” of far-sighted, well-informed private decision-makers (4) Models widely used by economists make it impossible to discuss failures in markets resulting from private-sector misperceptions, systematic errors (5) Models widely used by economists lead us to conclude that any failures result from mismanagement by the government (6) Models widely used by economists leave only role (and only possible failure) for monetary
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This note was uploaded on 01/21/2011 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue University-West Lafayette.

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