And as with “serious” music, when economics becomes so divorced from reality that it fails adequately to explain the real world in which people live, people reject it.
People rightly ask why academic economists failed either to predict or adequately explain the financial crisis, whereas heterodox economists working in the real economy – many of them untrained in formal economics – not only predicted it but correctly identified the causes.
There is a real danger that the anger people feel over what they see as the failure of mainstream economics leads to rejection of mainstream economics in its entirety and, importantly, withdrawal of funding for academic economic research. This, I feel, would be a mistake.
Frances Coppola, 27 JULY 2012
Economic theory discredited at IntCom