From model failures to streams of data

Thomas Aubrey

Chapter Chapter 2 in Profiting from Monetary Policy, 2013, pp 32-50 from Palgrave Macmillan

Abstract: Abstract The negative performance of pension funds since the Financial Crisis started in 2007 has provided the market with a new stream of data that exposes the Great Moderation as nothing more than a Great Myth. This Myth, with its impeccable intellectual background, became the framework for an entire generation of financial market practitioners, resulting in the fall of future retirement income for savers as well as increasing unfunded liabilities for tax payers. In conjunction with this new stream of data, a groundswell of opinion has begun to attack the very foundations of the Myth as it no longer fits the facts. Indeed, some economists and successful investors have argued that it never fitted the facts and that economic modelling is incapable of providing any useful predictions about the future anyway. An economy is a highly complex system and the simple assumptions made that are supposed to help predict the trajectory of an economy are highly dubious. However, like any idea that has had some longevity, it is unlikely to go down without a fight.

Keywords: Monetary Policy; Central Bank; Model Failure; Current Account Deficit; Taylor Rule (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-28970-4_3

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137289704

DOI: 10.1057/9781137289704_3

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().