Wednesday, February 8

So what caused the financial crisis? We don't know

I thought you would be interested in this article written by Andrew Lo. I found this quote fascinating, specially since he managed to pull in Rashomon as a metaphor. (wonder why he missed out on the Blind men and the Elephant metaphor)).

it may seem like sheer folly to choose a subset of books that economists might
want to read to learn more about the crisis. After all, new books are still being published
today about the Great Depression, and that was eight decades ago! But if Kurosawa were
alive today and inclined to write an op-ed piece on the crisis, he might propose Rashomon as
a practical guide to making sense of the past several years.

Here is the abstract, the article is worth reading in full.

The recent financial crisis has generated many distinct perspectives from various quarters.
In this article, I review a diverse set of 21 books on the crisis, 11 written by academics, and
10 written by journalists and one former Treasury Secretary. No single narrative emerges
from this broad and often contradictory collection of interpretations, but the sheer variety of
conclusions is informative, and underscores the desperate need for the economics profession
to establish a single set of facts from which more accurate inferences and narratives can be

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