Why Did Economists Not Foresee the Crisis

Why did economists not foresee the crisis?

In August, 2006，John L.Petersen announced that the world crisis is coming and analyzed the start time (December 2007) of economic crisis from month to month, and what can appear in January and march separately. But China economist has not been paid attention on it, as if this matter had no impact on China. However, after Lehman Brothers Holdings broken up, economists got sudden comprehension of the truth. But it was late, global financial crisis has been to. Why did these economists not foresee the crisis?

When collecting most of Economic Review, we can easily find out that these arguments were usually written after the crisis happened. Is it a coincidence? No, absolutely not. Actually it is difficult to predict what will happen in the future. Though for economists in America, which is the world's largest economy, failed to estimate the recession in 1974 and some other big depressions. Not along China a speech-controlled country. If you are uncertain to your prediction and publish it, What if lead a wrong direction to people’s financial decisions. So that, they must have a great knowledge of economic market, and also of every possible factors that will change the results. Of course, they need a lot of courage.

Maybe some economists had foreseen the crisis, but few of peer agree with it or they had little Confident with themselves. Then they kept silent.

Another reason led wrong judgments might be varies of the bias mathematical models. Economic market is change all the time, the model fitted yesterday might not fit today.

All in all, economics should be responsible, do their best to warn us before the depression come.