Mark Thoma has a note on the paper he is giving at the AEA which makes the case that economists can sometimes worsen a situation by giving bad advice - as happened in 2003-2007, apparently. It is a nice model , and it is a nice and mildly heterodox paper, but I think it gives way too much respect to economists. Bad advice sounds so... neutral. As the very unprofessional and not nice Matt Tsibbi wrote in Griftopia, one economist in particular, Alan Greenspan, gives us an example not so much of bad as of malign advice. He gave a speech lauding ARMs in 2002 - which he intoned was a good deal if interest rates weren't going up - and then turned around and used all his power as Chairman of the Fed to raise interest rates. Malign advice wouldn't be mildly heterodox, but would cross the boundaries. So instead of using herding models culled from economics, I would turn to other models to explain the economists supported Great Moderation cul de sac. It is simply that the counsel
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