2007-2008 Discussions on Predictability of The Global Financial Crisis

The recent financial crisis has triggered significant debates concerning economic theory and policy. The most important discussions focused on the question: ‘why was the crisis not foreseen?’. In this context, the question of why the 2007-2008 global financial crisis was not foreseen is addressed from three different perspectives. The first view is that the crisis could not be predicted by economists in general and that the recent financial crisis emerged as a surprise for most of the academicians and policy makers. Another view is that the crisis was foreseen by some economists, but these predictions were not taken into account. Finally, an entirely different view is the approach that states that economics / economists do not have to predict the crisis. The study also provides a discussion of the methods used by economists in analysing the economy and formulating their proposals.