THE GLOBAL FINANCIAL CRISIS, CREDIT CRUNCHES AND DELEVERAGING

I do not know anyone who predicted this course of events. This should give us cause to reflect on how hard a job it is to make genuinely useful forecasts. What we have seen is truly a ‘tail ’ outcome – the kind of outcome that the routine forecasting process never predicts. But it has occurred, it has implications, and so we must reflect on it (Stevens 2008: 7). The proposition that the crisis was inherently unpredictable is a recurrent theme amongst those charged with preventing such events. It is also a convenient untruth. A Netherlands academic did a rather better survey of the literature than Governor Stevens, to identify 12 economists and market analysts who did foresee this crisis—of whom I was one (Bezemer 2009: Table 1). More importantly, he identified common elements to the analyses that led these researchers to foresee what neoclassical economists in particular failed to anticipate. Bezemer noted that though we came from varied intellectual backgrounds, we share