Cassandras of current financial crisis

In Greek mythology, Cassandra was granted the gift of prohecy, but was cursed such that no one would ever believe her predictions.

Quite some time back, I read with interest this article in Nouriel Roubini’s RGE Monitor on "the thinkers who predicted early on many aspects of this financial crisis". Many of the "Cassandras of current financial crisis" are mentioned.

Great article ! At least we would know whose theories/methods to learn from to make sense of root causes of the current financial crisis. Maybe we can learn the ability to "forecast" too.

Highlights of these "Cassandras of this financial crisis":

  • Robert Shiller : housing bubble
  • Kenneth Rogoff and a few other economists: the unsustainability of the US current account deficits and of the global imbalances
  • Raghu Rajan: agency problems and incentive distortions deriving from compensation schemes in financial institutions
  • Nassim Taleb and a few other finance scholars: the risk of fat tail extreme events in financial markets
  • Paul Krugman: currency and financial crisis theories in international macro
  • Stephen Roach, David Rosenberg and a few other financial sector analysts: the shopped-out, saving-less, bubble-addict and debt-burdened US consumer
  • Niall Ferguson: between historical episodes of financial crises and current vulnerabilities
  • Hyun Shin and other scholars in academia: modeling of illiquidity and of the perverse effects of leverage during asset bubbles
  • William White and his colleagues at the BIS: how the "Great Moderation" may paradoxically lead to "Financial Instability", asset and credit bubbles and financial crises
  • Gillian Tett and a few other FT journalists: complexity of credit derivatives and structured finance and of the systemic risks deriving from these new exotic financial instruments

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