by Christine Lagarde must have been reading my blog … European Central Bank President Christine Lagarde launched a stinging attack on the economics profession on Wednesday (17 January), accusing analysts of having “blind faith” in their models, which often bear little connection to reality. Speaking at an event entitled “How to Trust Economics” at the World Economic Forum in Davos, the ECB chief also suggested that economists constitute a “tribal clique” whose models largely discount the possibility of “exogenous shocks” such as pandemics, climate change-induced weather events, and sudden supply shortages – all of which have severely impacted Europe’s economy over the last few years. Lagarde … also noted that upon assuming her current position as ECB
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Christine Lagarde must have been reading my blog …
European Central Bank President Christine Lagarde launched a stinging attack on the economics profession on Wednesday (17 January), accusing analysts of having “blind faith” in their models, which often bear little connection to reality.
Speaking at an event entitled “How to Trust Economics” at the World Economic Forum in Davos, the ECB chief also suggested that economists constitute a “tribal clique” whose models largely discount the possibility of “exogenous shocks” such as pandemics, climate change-induced weather events, and sudden supply shortages – all of which have severely impacted Europe’s economy over the last few years.
Lagarde … also noted that upon assuming her current position as ECB president in 2019 she explicitly warned its Governing Council and analysts to “beware of models”.
“Many economists are actually a tribal clique,” she said. “[They] are among the most tribal scientists that you can think of. They quote each other. They don’t go beyond that world. They feel comfortable in that world. And maybe models have something to do with it.”