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Great Recession and Not-So-Great Recovery: “Cat in the tree” analogy

In Financial competency on 23/04/2013 at 5:19 am

The Nobel Prize winner George Akerlof of the University of California – had a vivid analogy for the state of uncertainty the economics profession now faces.

“It’s as if a cat has climbed this huge tree – the cat of course is this huge crisis. My view is ‘oh my God the cat’s going to fall and I don’t know what to do’.”

Another one of the organisers, David Romer also of the University of California, picked up the analogy: “The cat’s been up the tree for five years. It’s time to get the cat down from the tree and make sure it doesn’t go back up.”

The trouble for the economics profession is, according to the last of the conference hosts and another Nobel Prize winner, Joseph Stiglitz: “There is no good economic theory that explains why the cat is still up the tree”.

http://www.bbc.co.uk/news/business-22223249

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