Joseph E. Stiglitz
Author information
Business School, Graduate School of Arts and Sciences (Department of Economics) and School of International and Public Affairs, Columbia University, New York, NY 10027, USA; Chief Economist of The Roosevelt Institute
E-mail: jes322@columbia.edu
In this article, Nobel Prize Laureate Joseph Stiglitz argues that the standard macro-economic paradigm has failed not only to predict the crisis but also to provide insights into the design of a regulatory framework that would make a recurrence less likely. He points out that many of the underlying assumptions of the standard paradigm always seemed implausible and many of its predictions, such as those concerning the micro-economic behavior of the constituents (firms and households), are inconsistent with the empirical evidence. He then identifies a number of key modeling challenges, what he views as key ingredients that have to be incorporated in any model that is going to describe economic fluctuations or be the basis of a well-designed regulatory or monetary framework.
macro-economic models, market failures, financial crises, systemic risk, regulatory framework
Joseph E. Stiglitz. An Agenda for Reforming Economic Theory. Front. Econ. China, 2019, 14(2): 149‒167 https://doi.org/10.3868/s060-008-019-0009-3