The End of Theory: Financial Crises, the Failure of Economics and the Sweep of Human Interaction Richard Bookstaber Lucas

As Queen ELIZABETH II famously once pointed out, most economists failed to predict the crisis of 2007-08.

In a lecture to the American Economic Association in 2003, Robert Lucas argued that macroeconomics had succeeded in so far as the “central problem of depression prevention has been solved, for all practical purposes”.


Yet within five years the world faced its worst crisis since the 1930s.

The Economist Print 18 May 2017


When the Queen asked asked an academic at the LSE why the economics profession had failed to predict the credit crunch, she raised a topic which continues to resonate. 

Although many answers have been given to Her Majesty’s question, I suspect that none of them has really settled the issue. Her question is disarmingly simple, but the answer is not.

Gavyn Davies blog, February 10, 2011


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