Tim Wallace — Economists need to get into the real world, says Bank of England chief economist Andy Haldane

Economists are too detached from the real world and have failed to learn from the financial crisis, insisting on using mathematical models which do not reflect reality, according to the Bank of England’s chief economist Andy Haldane. 

The public has lost faith in economists since the credit crunch, he said, but the profession has failed to thoroughly re-examine its failings to come up with a new model of operating.Instead, he fears, it is still using the same failed analyses, and is still failing to speak effectively to the public 

This applies to an all manner of areas, from studies of the financial meltdown to analysis of the Brexit vote. 

“The various reports into the economic costs of the UK leaving the EU most likely fell at the same hurdle. They are written, in the main, by the elite for the elite,” said Mr Haldane, writing the foreword to a new book, called ‘The Econocracy: the perils of leaving economics to the experts’....

The Telegraph
Economists need to get into the real world, says Bank of England chief economist
Tim Wallace

Andrew G Haldane: Managing global finance as a system

Text of the Maxwell Fry Annual Global Finance Lecture, given by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, at Birmingham University, Birmingham, 29 October 2014

Bank of International Settlements
Andrew G Haldane: Managing global finance as a system

Andrew G Haldane — Unfair Shares

Inequality has become the issue du jour – especially, it seems, when it is expressed in French. Yet until recently, inequality was a deeply unfashionable topic among academics and policymakers. Until the crisis, it is difficult to identify a period in the past 50 years when inequality was close to the top of the public policy or academic agenda (Stiglitz (2012)).

Bank of England
Unfair Shares
Remarks given by Andrew G Haldane, Executive Director, Financial Stability and member of the Financial Policy Committee
At the Bristol Festival of Ideas event, Bristol, 21 May 2014

Marshall Auerback — Andy Haldane: The Counter-Reformation in Banking Has Just Begun

“Too big to fail” banks create three disastrous problems, any one of which should have been sufficient decades ago to convince our politicians to get rid of them.

1. They make a mockery of the phrase “free markets.”

2. TBTF bank failures risk causing global financial crises.

3. TBTF banks create so much economic power that it inherently translates into dominant political power and cripples our democracy by creating crony capitalism and the corresponding problem of “too big to jail.”

To judge from Haldane’s message, we still have a long way to go. For one thing, perhaps for reasons of time, his speech didn’t once mention the so-called “shadow banking system,” even though almost three-quarters of today’s credit intermediation in the U.S. takes place outside the conventional banking system. The big conclusion that one inevitably draws from Haldane’s analysis is that the structure of banking should be reorganized to promote both economic stability and economic development. Banking used to be a simple boring job; it needs to go back there.

The Council of Trent took place over a period of 40 years. If one is to interpret the underlying message of Haldane’s speech in Trento, we’ll be lucky if we can deal with today’s counter-reformation in banking in less than half that time.

INET
Andy Haldane: The Counter-Reformation in Banking Has Just Begun
Marshall Auerback

Chris Cook — Reality-based Economics

Message from Chris Cook to Gang8 on where he sees the monetary system headed.

Yahoo Groups | Gang8 - devoted to Creditary Economics
Reality-based Economics
cjenscook

Philip Aldrick — Loss of income caused by banks as bad as a 'world war', says BoE's Andrew Haldane

The financial crisis has been as economically devastating as a world war and may still be a burden on “our grandchildren”, a top Bank of England official has said.

The Telegraph (UK)
Loss of income caused by banks as bad as a 'world war', says BoE's Andrew Haldane
Philip Aldrick | Economics Editor

William Davies interviews Andy Haldane

William Davies: In your speeches, you draw on economic history, on political economy, complexity theory and recent developments in economic methods. Could you say a little bit about how you came to have such a multi-disciplinary perspective? Is it a deliberate strategy on your part and what are you trying to achieve with that?

Andy Haldane: Looking back at the way my thinking has been moving over the last few years, the stories I’ve been telling have been in the spirit of evolutionary economics. Questions such as – why is it that we found ourselves traversing along this or that path, for the economy or the financial system? Usually, if you can explain why it is we’re on that path, it gives you some reasonable insight as to what behaviours were driving it and how you might need to alter those behaviours to get on a different path. My proposed stories about the crisis were not that behaviours were driven by stupidity or wickedness, but rather that the rules of the system had been designed in ways that may have made sense individually, but the actions of those individuals and institutions were added up, it made for a system that did fairly crazy things. 

Our Kingdom | Power & LIberty in Britain

'Central banks should admit their mistakes': an interview with the Bank of England's Andy Haldane
William Davies and Andy Haldane
(h/t INET)