Picture_99

What Went Wrong? Ask Nobel Laureate Vernon Smith

For this week’s installment of What Went Wrong? we bring you an interview with the Nobel Prize winning economist, Vernon Smith. Having studied bubbles inside and out, he has said before that most bubbles don't have the power to bring down an entire system. So what happened this time

Smith believes we've forgotten the lessons of the twenties and thirties when it comes to the housing markets—if you look at the situation now, you’ll notice a lot of the same conditions in this recurrence. Did Bernanke do a good job in trying to prevent the crisis? Smith thinks he simply didn't see it coming-- what we faced was truly a solvency problem, not a liquidity problem. To remedy the situation, Smith proposes a bit of healthy inflation. But his main concern is: how do we achieve a small amount of inflation without risking too much?

A network of top economics bloggers provided some questions for the interviews. They also weigh in on the answers every week:

Economist’s View - Mark Thoma, Professor of Economics, University of Oregon

Economics One - John B. Taylor, Professor of Economics, Stanford University and former Undersecretary for International Affairs, U.S. Treasury Department

The New Republic’s The Stash - Noam Scheiber

The New Yorker’s The Balance Sheet - James Surowiecki - Columnist, and author of bestseller The Wisdom of Crowds

Marginal Revolution - Tyler Cowen, Professor of Economics, George Mason University

Reuters Finance, Felix Salmon

The American Prospect’s Beat the Press - Dean Baker, Professor of Economics, Bucknell University and Co-Director, Center for Economic Policy Research

The Money Illusion - Scott Sumner, Professor of Economics, Bentley University

Café Hayek - Russ Roberts, Professor of Economics, George Mason University and a research fellow at Stanford University’s Hoover Institution

The Atlantic’s Atlantic Business Channel - Dan Indiviglio

The Fly Bottle - Will Wilkinson, Research Fellow, Cato Institute

The Big Questions - Steven Landsburg - Professor of Economics, University of Rochester and Columnist, Slate

Econlog - Arnold Kling, Adjunct Professor of Economics, George Mason University and former employee of both Freddie Mac and the Federal Reserve

The Atlantic’s Asymmetrical Information - Megan McArdle, Managing Editor, The Atlantic

Causes of the Crisis - Jeff Friedman, Visiting Professor of Political Science, University of Texas and Founding Editor, Critical Review,

National Review’s The Corner/The American Scene - Jim Manzi – Chief Executive Officer, Applied Predictive Technologies

The Economist’s Free Exchange/The Bellows - Ryan Avent, Online Editor, The Economist

Naked Capitalism - Yves Smith, President of Aurora Advisors, and former employee of both Goldman Sachs and McKinsey & Co.

comments powered by Disqus
×