Many forecasters have relied on a model that has yielded overly optimistic predictions for the economy’s recovery from the Great Recession. The standard model has performed poorly because it is ill-suited for dealing with housing cycles, especially those that include speculation-driven housing purchases, unusual levels of mortgage credit, and large international capital flows.

Vernon L. Smith is a member of Independent Institute’s Board of Advisors and Professor of Economics at Chapman University.
Economic PolicyEconomistsEconomyPhilosophy and Religion
Other Independent Review articles by Vernon L. Smith
Summer 2024 The Economic Function of Inflation Is to Lower the Real Value of Wealth Assets Sufficiently to Pay for the Government’s Excess Spending Monetized by the Federal Reserve
Summer 2023 Adam Smith, Sociality, and Classical Liberalism
Summer 2020 Classical Economics: Lost and Found
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