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ocschwarAll models are wrong. Some models are useful.
Spent part of the afternoon reading this paper on finance: When Fragile becomes Friable: Endemic Control Fraud as a Cause of Economic Stagnation and Collapse, by William Black. This guy is the authoritative scholar on the S&L scandal of the 1980's, and this 12 pager is a distillation on his thinking on the interplay between economic policy and white collar crime. (Naturlich, he's been having a field day every day for the last two years over the collapse of the housing market.)
His point is that classical economists have failed to predict the waves of white collar crime that the financial sector experienced both recently and in the 1980's, even though at the same time white collar criminologists did predict them, and that therefore economists have no choice (well, no honest choice) but to take a hard look at the literature in criminology and integrate it into their own theories on economic policy, and that neo-classical economic policy prescriptions are what lays the ground work for major white collar crime.
I put the quote above to indicate that no, I do not believe neo-classical economists are the spawn of Satan.
Spent part of the afternoon reading this paper on finance: When Fragile becomes Friable: Endemic Control Fraud as a Cause of Economic Stagnation and Collapse, by William Black. This guy is the authoritative scholar on the S&L scandal of the 1980's, and this 12 pager is a distillation on his thinking on the interplay between economic policy and white collar crime. (Naturlich, he's been having a field day every day for the last two years over the collapse of the housing market.)
His point is that classical economists have failed to predict the waves of white collar crime that the financial sector experienced both recently and in the 1980's, even though at the same time white collar criminologists did predict them, and that therefore economists have no choice (well, no honest choice) but to take a hard look at the literature in criminology and integrate it into their own theories on economic policy, and that neo-classical economic policy prescriptions are what lays the ground work for major white collar crime.
I put the quote above to indicate that no, I do not believe neo-classical economists are the spawn of Satan.
