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RE: LeoThread 2025-08-17 05:22

in LeoFinance2 months ago

about the world. Then it declined and it's only more recently that people started thinking about beliefs and expectations other than rational expectations in a more systematic way. Well there's been a renewed interest in behavioral theories and finance in particular in economics after the crisis. I think if I would say that finance did better than macroeconomics with respect to the crisis, I'm not sure finance was that effective in predicting the crisis, but it is certainly the case as we try to explain in the book that finance understood the mechanics of the crisis extremely well. I think that probably played some role in accelerating policy right after Lehman or producing prescriptions for policy right after Lehman. Economics, I think, was far behind precisely because it didn't have a way of thinking about errors and beliefs following the financial crisis, around the financial crisis. One of the things that it comes out from reading your book is you make it salient, the point (7/44)