Ruchir Sharma, Morgan Stanley top analyst on public disillusion with economics profession
A small extract from the book, The Rise and Fall of Nations: Ten Rules of Change in the Post-Crisis World, by Morgan Stanley Head of Emerging Markets, Ruchir Sharma, http://www.amazon.in/Rise-Fall-Nations-Change-Post-Crisis/dp/0241188512, Page 11:
Public disillusion with the economics profession has been growing, since it failed to foresee not only the events of 2008 but also the many crises that have shaken the world before and since. Economists are under attack even within their own ranks for being too academic and for being too focused on elegant mathematical models and theories that pretend humans always act rationally and on historical data that change too slowly to capture what may come next.
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Ravi: I think the above words reflect the sentiment of not only many people on the street (including me) but also of top elected political leaders in some countries of the world. The top elected political leaders have had to pass, and may have to do so in future too, HUGE tax payer funded bailouts of TOO BIG TO FAIL finance and banking companies that has made many of the associated countries' citizens furious. The political leaders had to do it on the advise of top economics and financial advisors who warned (and may warn similarly in future) of economical or financial apocalypse if their advise is not heeded! I sure would hate to be in the shoes of these top political leaders in such situations! A horrible situation to be in - damned if you do, damned if you don't!
I think the world's economic and financial systems have become so complex that top leaders, both from political field and economics & financial fields, do not have a clear idea of what's going on, and are not really in control. I mean, they sure have some level of control but it is not as if they can surely prevent a recession or even a depression in the economy of a country solely or mainly by their policy decisions. And then there is the question about the validity of the data, based on which the decisions are recommended and made. At least for emerging economies including India, concerns have been expressed by some top economics and financial figures of the world, about the validity of the data, to some extent.
For example, Ruchir Sharma disputes the growth rate of over 7% reported by India, an emerging economy, viewing it as overstated. The USA govt. too seems to agree with the overstated part; see India's GDP growth rate probably 'overstated', PM Modi slow on economic reforms: Obama Govt, http://www.ibtimes.co.in/indias-gdp-growth-rate-probably-overstated-pm-modi-slow-economic-reforms-obama-govt-685663, dated July 6th 2016.
Ruchir Sharma stated in this interview, http://www.huffingtonpost.in/prabha-chandran/exclusive-india-will-rise_b_10750458.html, dated June 30th 2016, "I think India is growing at a pace between 5 and 6%, or about two points lower than the government claims."
[I thank Ruchir Sharma and the publisher of his above mentioned book, and huffingtonpost.in, and have presumed that they will not have any objections to me sharing the above small extract from their book/website on this post which is freely viewable by all, and does not have any financial profit motive whatsoever.]
Public disillusion with the economics profession has been growing, since it failed to foresee not only the events of 2008 but also the many crises that have shaken the world before and since. Economists are under attack even within their own ranks for being too academic and for being too focused on elegant mathematical models and theories that pretend humans always act rationally and on historical data that change too slowly to capture what may come next.
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Ravi: I think the above words reflect the sentiment of not only many people on the street (including me) but also of top elected political leaders in some countries of the world. The top elected political leaders have had to pass, and may have to do so in future too, HUGE tax payer funded bailouts of TOO BIG TO FAIL finance and banking companies that has made many of the associated countries' citizens furious. The political leaders had to do it on the advise of top economics and financial advisors who warned (and may warn similarly in future) of economical or financial apocalypse if their advise is not heeded! I sure would hate to be in the shoes of these top political leaders in such situations! A horrible situation to be in - damned if you do, damned if you don't!
I think the world's economic and financial systems have become so complex that top leaders, both from political field and economics & financial fields, do not have a clear idea of what's going on, and are not really in control. I mean, they sure have some level of control but it is not as if they can surely prevent a recession or even a depression in the economy of a country solely or mainly by their policy decisions. And then there is the question about the validity of the data, based on which the decisions are recommended and made. At least for emerging economies including India, concerns have been expressed by some top economics and financial figures of the world, about the validity of the data, to some extent.
For example, Ruchir Sharma disputes the growth rate of over 7% reported by India, an emerging economy, viewing it as overstated. The USA govt. too seems to agree with the overstated part; see India's GDP growth rate probably 'overstated', PM Modi slow on economic reforms: Obama Govt, http://www.ibtimes.co.in/indias-gdp-growth-rate-probably-overstated-pm-modi-slow-economic-reforms-obama-govt-685663, dated July 6th 2016.
Ruchir Sharma stated in this interview, http://www.huffingtonpost.in/prabha-chandran/exclusive-india-will-rise_b_10750458.html, dated June 30th 2016, "I think India is growing at a pace between 5 and 6%, or about two points lower than the government claims."
[I thank Ruchir Sharma and the publisher of his above mentioned book, and huffingtonpost.in, and have presumed that they will not have any objections to me sharing the above small extract from their book/website on this post which is freely viewable by all, and does not have any financial profit motive whatsoever.]
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