Econintersect: This 30 minute discussion with Nassim N. Taleb and Robert J. Shiller, moderated by Nick Paumgarten is from 2009 and is entitled “Financial Collapse”. It is interesting to watch this discussion from nearly six years ago and marvel how little has changed since.
Near the beginning of the video Prof. Shiller discusses his years as an “outcast”. The 14-year term he spent on the academic advisory council of the Federal Reserve Bank of New York apparently does not rank high on his list of accomplishments: It is not even mentioned in his 458-word Biographical Sketch. The term ended in 2004 when the just-appointed New York Fed Chairman Timothy Geithner dismissed him from the panel a few days after he made his only presentation in Geithner’s presence on the topic of “Bubbles”. Of course, Shiller is now recognized for his repeated identification of bubbles closely before or almost coincident with their peaks.
The point is that the mainstream of macroeconomics has no recognition of bubbles; collapses cannot occur in the normal progression of things because the economic world exists in equilibrium. Shiller describes how he was “ostracized” from macroeconomics at Yale because of his failure to conform to the mainstream tunnel vision and how he was removed from the New York Fed advisory panel apparently for the same reason.
Hat tip to Pavlina R. Tcherneva.
Source:
