Interview with Nobel economist James Heckman (3/3)

[CT27NX]

now i'm drawing a parallel between:

a) the assumption that house prices will keep going up;

b) the phillips curve's assumption that lowering unemployment brings higher inflation (and, to some extent, also considered vice versa)

a) relates to this current crisis (one of the roots of it)

b) relates to the crisis in the 1970's (where inflation was spiralling up, but unemployment also rose)

for b), the common consensus became: true in short-run; not so in long-run.

- i wonder what a) will be?

[CT27NX]

perfect - just a perfect summary of events, reasoning and failures

where he touches on that "for a while it was very nice" is remarkable! it's so true!

people aren't just inherently bad (that they just amassed so much greed); nor are they so inherently stupid (that they'd just push aside the thought that someone may be taking advantage of them)

- the support that credit gave to development (at least perceived as so), was perhaps the biggest motivator to continue running things in this manner.