The Blind Spots of Economic Theories

The video discusses the build-up to economic crises, focusing on the Keynesian framework and the historical nature of economics. It highlights financial system imbalances, particularly in the late 90s and early 2000s, and the predictions of Wynne Godley. The discussion extends to asset booms and leverage, drawing parallels with past crises like the Great Depression. The video concludes with insights from theorists like Kindleberger and Minsky, emphasizing the recurring patterns in financial markets.

What were the key indicators that suggested the financial system was becoming imbalanced leading up to the crisis?

How did household borrowing contribute to the financial crisis according to the text?

Discuss the role of leverage in the asset price increases mentioned in the text.

What historical events does the text compare the mortgage events of the 2000s to?

Why did economists choose not to acknowledge the evidence of impending crisis as mentioned in the text?