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Q.

Will the world learn lessons from the present financial crisis?

Asked by Good Citizen, 10 Sep '09 12:25 pm
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Answers (7)

 
1.

Yes, the present crisis should also lead economists to rethink the recent movement towards using real business cycle models. Like earlier, classical models, these models also posit that there should be no involuntary unemployment in the economy, an assumption that may be readily challenged by the present crisis. Real business cycle models also rely heavily on individuals having rational expectations. However, recent research on behavioural economics has emphasised that consumers are not completely rational and that factors like financial contagion, herding, and peer pressure can play a vital role in economic decisions.

Along these lines, a number of economists, such as Jeffrey Sachs and Joseph Stiglitz, have argued that the Asian Financial Crisis had more to do with over-investment in property markets and subsequent herding in currency markets than any problems in the real economy. These observations suggest that more attention should be given to integrating the results of behaviour ...more
Answered by dharamender nebhnani, 10 Sep '09 02:49 pm

 
  
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2.

Yes sure .
Answered by Tushar Kher, 10 Sep '09 12:32 pm

 
  
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3.

Borrow as much as who are in usa,
Answered by mohd basheer, 10 Sep '09 12:30 pm

 
  
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4.

Its enough if our Indian IT people learn the lesson
Answered by ala, 10 Sep '09 12:28 pm

 
  
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5.

Some of them may be keen to learn.
Answered by krishna bhojwani, 10 Sep '09 12:28 pm

 
  
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6.

Let us hope so.
Answered by Damodar Biswal, 10 Sep '09 12:27 pm

 
  
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7.

It has to needless to say...!
Answered by Dil Se, 10 Sep '09 12:26 pm

 
  
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