I think the obvious ideas are the best. They are latent, out there, but dont gel until someone names them. And when you do, it is obvious. I think people are sensing that there is something deeply wrong and troubling with the narrative that tells them the United States is in trouble because there are no so many minorities. They need another story, though, before they can say i am throwing that aside and dont want to be associated with it. So i think if i were speaking to this audience, midwestern republican audience, i would Say Something like this we need to stop for a second and talk about the demographics of the Republican Party. You know that party is 90 white. 98 of republican elected officials are white. All persons of good will need to stop and ask how did that happen in a country which whites are 64 of the population . What is going on . And some of you may find this hard to hear. I want to be clear this isnt a story about bigots. It is a story about all of us. I would really try communicate i am not interested in assigning blame or looking for bigots or throwing race out to inflame passions. I want to talk to people of good will who want to know what happened to the country and why the middle class is in crises and levels of wealth inequality we have not seen in hundreds of years. We need to stop, slow down and hook at what is happening with the Republican Party and have a hard conversation about the work that racial fear is doing. Right . I think that would i reach them . A few. But i think we start this conversation and reach the few and build from there. That is how we move forward. [ applause ] that is all of the time we have for this evening. I am like to send a very warm thank you to heather and ian and rich and the team at dmos that made this evening happening. If you have not checked out dog whistle politics we have a couple copies by the it register. Have a lovely evening. Thanks heather. [ applause ] you are watching booktv, non fiction authors and books every weekend on cspan 2. Financial times columnist tim harford talks about his new book the undercover economist strikes back he talks about aboutic talks about economics and the world. Welcome to everyone. I am douglas and i am a policy annal analyst for global forum. As many of you know, pj was here last night talking with his new book, and it happens i was amused to see that he is featured in tims book. The first chapter starts with a quote by him i will read it to you microeconomics concerns things that enonmist are wrong about and macroeconomics is things that are wrong generally in micro, at will he there is a wellestablishes set of tools, models and methods on which most academics agree. And by the standards of social science, there is a rigorous way of settling disagreements. There is certainly some scope for rigorous testing. I think the situation is different between macroeconomnist. They like to say micro is 130 and macro is no through 30 with a variety of opinions. Think about basic socially relevant policy questions like did the obama stimulus increase employment . If not was it too big or too small . We cannot run a controlled experiment on a policy question so there is always a lot of uncertainty responding the answer. Not taking the claims from people that think they know for sure. Tims book, which he is going to discuss with us, doesnt shy away from these differences. It is is rare induction introduction to a way in funny and engaging and doesnt dumb things down like many like to do. Let niasia ellme say a few wordm first he has a long running column and talks about every day life. But his new column offers a spectacle look at the idea. And he has written four successful books. As it broadcaster he has been with bbc radio with his more or less show and his new series started last year. L he received an economic award from a journalism in 2006 and runnerup in 2010. This radio Award Services were awarded on several occasions. New york times, and magazines ranging from forbes to wire and a number of other radio and television programs. He lives in oxford. He is a visit fellow at matt field college. Alex is a professor at Georgia Mason university. He works on public and law economics. Patton and the effectiveness of bounty hunters compared to the police, problems related to the judicial systems and how poverty rates affect trial decisions. He looks into the problem of Organ Transplants and market supply increases the ones available. And regulatory issues most specifically drug regulation. He is a co author of the hugely successful blog marginal revolution. And a cofounder of an Online University program. He has written a series of text books. He is a fellow at the marcade center as well. The idea for the afternoon is to have each speaker speak for 25 minutes and then we will open it up for q a and try to conclude the session by 1 30 p. M. Without further ado, i would like to turn it over to tim harford. [ applause ] the thing that annoys me about dthis debate is it isnt mathematical or dishearteningly political. People dont want to see why it ticks. They are interested in sound bytes and tribalism. The statistic crgripping the newspaper was the richest 85 people control more wealth than the poorest three halves. And the richest 85 people could sit comfortable on a doubledecker bus. And i thought there were interesting things we could say about wealth and quality and whether it is problem or not. But this isnt helping. And i can tell you why it isnt helping. Not only are the richest 85 people in the world controlling more wealth than the poorest half of the worlds population, i know a person who all by himself controls more wealth by the poorest billion in the world. He is my 2yearold son. He has no debt. And this wealth is approximately 0. Since the poorest billion people in the world have negative wealth, my son already controls not only more than any of them, but more than all of them together. This comparison doesnt make sense. And neath neither did the report nor did the weeks worth of titles about them. I wanted to do Something Different with the undercover economist strikes back. I wanted to talk about a subject that i dont need to make the case that macroeconomics is important. We have seen that the hard way over the past 67 years. I want to to be important, weird, fascinatinfascinating, a a doubt flawed. It has to have something that can offer. If we can spare the time and patience to figure out how it works. And leave side the claims and jargon and politics because i am bored of it. And today, just to give you a flavor and give alex something to talk about, i would tell you a story about the key character. It starts just before christmas in 1949 in london at the London School of economics. It is a seminar room and all of the greats are in the room. Robins who ran the department for many years was trying to set up a rival to cambridge. Robins brought in people like james mead, the great trade series who steered to british economy through the world war. And many other great economist that were brought in. On this particular day, the person giving the seminar wasnt a hot shot professor who was transported over from harvard. It was a mature student from new ze zealand and nervous. He was smoking away trying to calm this nerves. He was failing all of his exams, but robins thought this was the man that needed to give the seminar. And all of the others showed up to see him speak because there were rumors he was going to do something odd and extraordinary and they wanted to see it. The mans name was phillips and he was born in the rural part of a rural country. His dad was a dairy farmer. The farm was the only one in the area to have electric lights, flushed toilets and this was because this dad was an engineer and liked to solve things. He gave that same excitement for tinkering to bill. He taught bill to make his own toys and radio sets. And bill started developing his own inventions. So the first one is as useful as a lot of modern macroeconomics. He bought a book stand for the front of his mike. He had to cycle nine miles get the train and do it all over again. So the book stand allowed him to put his novels and text books on his bike. It wasnt a great success. But he did graduate to more successful projects. Bill phillips heard neighbor had a broken down truck and everybody in the neighborhood had given up on it. Bill popped the hood and said i have to be able to figure out what is wrong and how it works. He set the task of understanding how the engine worked. When he finished how it worked, he fixed the truck and got it go. He was 14 years old. And bill used to drive his friends all the way to school and park around the corner and drive all the way home. Bill phillips left school at 15 and didnt go to university. That was because his first brush of why economics and the economy is important. The Great Depression started. It started with the seize on wall street. And the scrabbling fingers of the this economic crisis were pulling down dairy prices all around the world even in new zealand. They didnt have enough to send bill to the university and he had to go get a job. His first job was working on a dam. He taught himself engineering while working on this dam. He decided he was going to leave new zealand. There is a line in the wall street journal of freaknomics that says steve levitt is the Indiana Jones of economics. But i dont think that is true. I dont think he is the Indiana Jones of economics. Bill phillips is the Indiana Jones of economics. He set up an open care and he worked many jobs. After writing the Transsiberian Railway he finally ended up at the London School of comings and signed up for an economic degree and the british air force. War broke out and he was sent back to the other side of the world to the singapore to fight. He was trying to solve problems still. He wrestled with how to get the machine guns lined up with the propell propellers so you could fire them without hitting your own plane. In europe, he heard the cuttingedge planes worked like that. But the singapore planes were out of date and bill managed to, with limited tools and aviation experience, managed to get the planes firing the way modern do. Bill was on the last refugee ship leaving singapore with civilians. And he was on charge with the weaponry and they air force found them, started dive bombing the ship. He built dozens of them to make cups of tea. It was very important British Empire at stake. And he made so many of them that every evening the japanese would notice that the lights in the prison camp were dimming. This was drawing enough electricity to make 2,000 cups of tea. It was a remarkable man. He and his fellow prisoners were moved to a different camp. They didnt know where it was. They didnt know what was going on. They had a pretty good idea because the first thing they were ordered to do was dig large mass graves in the middle of the camp. They could see the machine guns on the walls pointing inwards. Bill had another problem. His clock radio had broken. So bill and the novelist in the camp with him, and a third man came up with a fullproof scheme to fibbing the radio. When i tell you i think youll agree its riskfree. They were going to break in to the japanese camp Commanders Office in the middle of the night, take apart his radio, take the part out of his radio, and this is a genius bit. They would install in the japanese radio. Reassemble the radio, put it back together. The gene genius of this. When they switched it on it was fomenty and see the faulty component and order a replacement. It would be of the gift that kept on giving. They could go longterm. Bill fixed his radio and plugged it in, and the first thing that he heard was the news that the americans had dropped an atomic bomb on hiroshima and the war was about to end. When he got back to the school of economics, he decided he didnt want to study engineering anymore. His priority had changed. He had taken the mother of all years out. He switched to sociology. He wanted to understand why people could do the terrible thicks to each other. I apologize if there are any associationologists in the audience. He found it disappointing. He took a few modules in economic. He wasnt hugely impressed with economics either. He didnt think it answered important problems. He noticed one thing that fascinated him. James mead was drawing additional equations on the board. They loved the equation. The economists still love them. Theyre great. We cant get enough of them. And he noted the equations and recognized them. They were very similar to the equations he had been learning from his distance degree in engineering, his mail order engineering course, and had been using in the hydroelectricity power station. They were describing flow of water through solution gates and through turbines. The same basically the same stuff. And he went to james mead, so you to understand, hes failing every exam at this point. I had doesnt really care. He went to james mead and said ive got an idea. I want to rework your principles of economic lecture as a study in plumbing. Mead said if you are failing your exam you may want to try it with your professor. Just the thought. [laughter] because mead said, okay. Off you go. And bill took the summer off. Disappeared to a lockup belonging to his landlady with a colleague, he built a machine. S it was the machine that bill was demonstrated. A few weeks before christmas 1949 all the economics were there. And bill unveiled what looked like a exercise machine for goldfish. You have the tanks and theyre connected together by pipes and pumps and dams. They are filled with water. The water is stained pink so you can see it clearly. They have floats. The floats are attached to pegs and the pegs run through the carefully carved slotted responses the water risings. The float from one side or the other side. Could actually carve out a curve in literally carve a curve in the side of it. The tanks were labeled with things such as consumption or government expenditure. Taxation, exports. Imports. On the bottom a huge tank that reads national income. And bill reaches around the back of the machine and switches on the fuel pump he took from a wartime bomber. He took the entire machine from a wartime bomber. And the it was wearing away and as the water gets pumped up to flow down through the machine, bill explains these are astonished economists that what hes built is the first ever computer model of a national economy. After about five minutes the conversation quickly turns to how bill can be gavin professorship at the school of economics. I love the story about bill and his machine. Although the story has a saddened, i think. We come to. The reason i like the machines is not because its a good model of an economy. I think we can all agree that an economy is a lot more complicated than a bunch of interconnected fish tanks. But i love the way he tried to show something very important about the way the microeconomy works. You have to seat system as a whole. Weve already mentioned frederick is famous essay. What is not seen. Were constantly being lead astray in economics by reactive forces going on behind the back of our heads as we look at the particular phenomena. Bill said i want to put it in front of you. I want you to see everything that matters. You can see it flowing together. Its an important fact about any successful marc economic model. It has to show the system as a whole working. It became a wonderful teaching aid. Bill used to use it teach economics. It plugged the export pipe and the import pipe to the export pipe. And get two students out to front and say youre the chairman of the Federal Reserve. Youre the governor of the bank of england. Manipulate Interest Rates and see what happens. Water all over the floor. Its fantastic. One of the student he bulled out and asked to be chairman of the Federal Reserve. It was paul volcker. It was a pretty good teaching aid. What happened next is, to me, a shame. Because if you ask anyone who has done an undergraduate degree in economics about bill, they will know nothing about the japanese air force. They will know nothing about the prison camp and the med dahl. They may know about the philips machine. Theyre regarded as a quantity about kuwaited who would make a computer made of water these days . These days we have computer models that are more complicated and even better you can see how they work. Its an advantage. [laughter] how much its transparent. It seems quaint it doesnt seem important. There is one thing that people know about bill philips. Hes the discoverer of the philips curve. And bill observed the film lips curves was a correlation between the roughly speaking between unemployment. Its slightly different but its the basic idea. Inflation is high, unemployment is low, and inflation is low, unemployment is high. He put together some diagnoses. He draft paper and showed it to the colleagues. And they got very, very excited about this. They said you have to publish this. Its very important. He said, well, i dont think so. Its a rush job. Its just a correlation. His colleagues insisted and it became the most cited journal article in the history of Mariah Carey Marc economics. He picked up the philips curve and championed a point that government could choose a point on the curve. Then something happened. Milton fremont and ed monday and robert published powerful cra critique of the philips curve. Its a correlation. You have no idea of the underlying behavior driving it. It you dont understand the underlying behavior driving it. You dont really understand it. You cant rely on it. Theres a famous example from its like trying to prevent people from kicking the ball in american football iom hoping you know it better than i do. In the fourth attempt if you havent got the ball far enough forward, you will concede possession. And so the incentive is it kick the ball. Get it down the field. Let say the Regulatory Authority of the game wish to prevent punting. They dont want people to kick the ball away. Will well the philips curve said lets look at dat. It if you dont understand youre going get things done. Thats what they said was true about the philips curve. And something even more important happens. The oil crisis of the 1970s. And it completely failed. And the curve itself fell apart dissolved in to the air. And at that point, i think something damaged happening to macroeconomics started treating the data like an unfaithful spouse. With trust this person all the years they seems to be constant. When we really needed them. They betrayed us. Thats how economics started to feel about, you know, facts. Cant trust them. They seem useful but you cant trust them. And then for a long while, macroeconomics turned it back on the fact and focused on internal consistency. Lets understand the behavioral understand what is going on under the surface. Once we sorted that problem out, well look at the fact again. Unfortunately were still working on the internal consistency and having trouble resolving it with facts about the world. I think economics is starting to turn out again and very important useful piece of work being done. But i think it was a damaging episode unless you understand how it happened and why it happened, the floor of the macroseem incomprehensible. Why would you ignore the data. There is a reason. I dont advocate ignoring the data. I think it was a mistake. There was a reason, it wasnt crazy. You might wonder to yourself. What about bill philips during this . Bill never defended himself. He never believed the interpretation of the curve. He said its an interesting correlation. He always said its a rush job. Theres even some evidence that colleagues published the philips curve paper without his commission while he was on sabbatical. He never took it seriously. There was another reason which is by the time the shock hit and the curve disappeared, bill was dead. Had a stroke. He died young. I think thats sad not only because its sad whenever anybody died before the time. Because it was a great man. He was a practical thinker. He was pragmatic. And yet linked with an idea that was proved to be wrong that he never really believed in. What i really feel we need to keep of the spirit was this strange balance that he had. On the one hand saying we dont understand what is going open. Its just a correlation. Dont overrate your ability to understand the but at the same time he wasnt willing to give up. Wasnt willing to say its too hard. I dont understand it. Bill felt about the economy the way he felt about when he was 14 years old. Everybody else concluded that its broken down. Everybody else concluded theres nothing that anybody can do fix it. Theres nothing anybody can do to understand it. Im going to understand it and fix it. He did. Thank you very much. [applause] i want to mention the things i like and get to a little bit of critique. Jim, as you can see, a gene yous of story telling and brilliant at presenting complex ideas in a simple way which brings them to life. Here is how tim explains why it is important and why we need to model at least some of the time how people having expectations is because not everyone is charlie brown. Some people learn. Some people maybe are charlie brown. Thats why we need behavior economics as well. Tim also can be hard hitting when necessary. Little bit later im going say hes soft for my taste on some questions. As they might say a little whet. He could be hard hitting when necessary. I think its important. Not all of our problems are macroproblems. There are microproblems which we understand very well. In which need to be depressed. So tim points out, for example, in spain, the standard Employment Contract says for every year you work you get 125 years severance pay. You have a years they never want to fire people. Its too expensive. But because hiring someone has such potentially large consequences, they also never want to hire people. Particularly young people who you dont know. As a result youth unemployment rates, tim points out, have been hoovering around 50 during the euro crisis. Theres no sign of improvement. This is a deep microproblem. A regulatory problem, one which goes beyond the crisis. Its important to point it out. Replaces and happiness or, you know, the kind of method of happiness, economics, and so forth. Hes appropriately skeptical of this idea which physicists like to express that we can have economic growth. Democratic growth cannot go on forever. Cannot be a process because theres a limited amount of energy. We cant use exponentially more energy. Tim has a nice reputation of this. He points out that if im poor and cold and might have to put on a hat and might wear a sweeter indoors, and if i get a little bit richer im going turn off the heat and take off my hat. It doesnt mean if i win the lottery ill celebrate by foiling myself alive. We can get a lot rich or and not use that much energy. Im the director of the public Choice Center at George Maison university. Its not too surprising, i suppose, theres not enough public choice. I want to give a little little bit of a context to this. Its written as a q a. Questions and answers. Do we have the answers . The economy is a complex system. And there are many open questions. There are many frontiers of economics which we are still pushing against. If we know the answers, why arent we implementing them. Tim writes so beautifully and well. You think its easy to understand. Why . Why are we implementing the as. Why are we implementing the answers. Theres two sort of answers to that question. One is the kind of a paul crudeman answer its stupidity. People are stupid. Actually im actually a little bit similar pat koa with this. Contrary to popular belief, my political views and paul crudemans dont differ very much. Just a tiny little bit, actually. Apparently paul doesnt see that. The second answer to why, if we know the answers, assuming we know them. Why arent they being implemented is the public choice answer. That is incentive and institutions. There is a reason why politics doesnt respond in the way in which fixing the run it is not the same as the economy. There arent people trying to stop you from fixing it. There arent people who benefit when the truck doesnt work. When youre dealing with an economy, there are people who can benefit when the economy doesnt work. We need to understand that. Tim talked about the Gold Standard in his book. I dont want to tim is antiGold Standard but only a sentence or two. You dont have to think its a big part of the book. He gives a standard sort of reason why. Standard reason presented you cant print gold. They can crete money from thin air. Its like a super power. Use it. Okay. Lets go with this for a minute. Lets us suppose we accept the economics here. Okay. Theres a problem. Theres still a problem with this. What about the euro . Theyre having the same they of course the Gold Standard starts to look even better. And indeed if you look at the history of the Gold Standard it looks good. Theres a bit of a nirvana fallacy here. Way may not get the opt ufm even if we understand it. Because of the plilt reason. Thats important when we try to choose. Now i think we should go back on the Gold Standard . Do i think its a good argument for switch together Gold Standard . No. I think i agree with tim its archaic clearly bit coin is the way to go. Here is another one. The similar story the balanced budget. Tim is says it would be a disaster thats not what theyre doing. If theyre not in the political system is not going follow what the assumed standard economics recommends then again Something Like a balance Budget Amendment looks quite a bit better. More over, this doesnt consider the fact you cant do the unbalanced Budget Amendment, which is to save in good times so you can spend in bad. Sweden has a rule which says so you to run a 1 Budget Surplus over the Business Cycle. Not all the argument is against a against a balance Budget Amendment apply to reasonable that kind of constitutional rule. More generally, from my perspective, i thought, a little bit conventional. A little bit middle of the road. Tim basically argued that most Business Cycles serve a failure of demand plus wage and not all. Not all. But sort of most. I can understand that. I can see that. This is difficulty for, you know, modern economics. How long can prices and wages really be sticky . Keep in mind that when we hear, you know, the u. S. Economy created 100,000 jobs this month, what it means more like a u. S. Economy created a million jobs this month 900,000 jobs were destroyed. You dont want to cut someones wages. They get upset and mad. Because theres so much turn in jobs you can offer new employees wages. The, gasoline is expensive because they have to keep changes the prices. The menu cost, the cost of price changing can so large. What a shaiment. Its not a big deal to them at all. Why are the prices so sticky. It doesnt feel the story. Doesnt ring so true to me. So for me, price sticking is sort of like a giant and walking along and gets gum on the show. And sort of a falters and takes because of the gum on the shoe. Its not something that is hold back an economy. It doesnt seem right to me. I would argue that the real shock kind of stories. The sign of the economy is not not given enough. To give an alternative analogy or story. Here is the one which tyler and i tell in our principle of economics book. Real shock. These are weather shocks in india. On panel a is on the left here. What you see in green is the growth rate of agricultural output green for growth. Deviation of rainfall from the average. And what you can see in panel a when the rainfall is above average in india you get a lot of growth. Real gdp is above average. Its a real Business Cycle kind of story. When you think about most of the economy and most of the worlds history. Morse the worlds have the one i gave, you know, the weather this is a good example. But after the weather, you know, what are the other ones . Does the weather really apply to a developed economy . And of course whether shocks even in the United States still matter as we have seen recently tuesday the government was shut down because of the weather shock. We got a positive boost of gdp. After that its hard to come up with the oil shocks maybe. This is why in the rbc literature how is it small shocks are amplified . How are they translated from one part of the economy to the global economy, to the aggravate economy. A lot of work in this area whether you think a demand or supply model. A lot of transmission mechanisms. A lot of modern economics, i think, tells us important things. These are important areas of modern economics. Even if you think that the real shock driving it is not the right shock. To do that i want to set the stage. Just a tiny bit. In conventional rbc model there are one sector models. You say that the economy equal to some technology factor. Why one sector . It doesnt seem realistic. But the argument has been that interested in macroshocks. Literally something as effect in the entire economy and the argument is it requires a shock. The economy being a bunch of sectors, then the argument traditionally was that shocks to the sectors the fraction of the gdp is like 25 . So 50 firms youve got 25 of gdp in term of fails. Another women is coauthors if each sector sells an equal amount to every other sector then they cancel. If some sectors sell to many sector witness, they dont cancel. In fact, when you look at the u. S. Economy, you can sort of see theres at least three or four sectors here which sell to many, many other sectors. Manufacturing sells to many other sectors. The Financial Sector sells to many other sectors. I want to make a few conclusions. First, economics is a growing, vibrant disciplined with a multitude of approaches. And to accuse them of simply being dark age economists, i think is disa disservice to the economics profession. The economy is complex. There are a lot more questions than there are answers. Thats unfortune but it is going to be true. Public choice is important and understanding the limits of politics can help us to choose optimal policies. Those policies will be different when we recognize the constraint of politics. And finally. Thank you very much. [applause] i think before we open it up might be fair to give him a chance to defend himself. Its important. On the subject of using ya and complexity. Inevitably, you dont want to in answer to every question go nobody knows. Its complicated. They say, well, i personally if i had to make a bet this is what i think. One of the things i joy is give the reader a choice and imagines the reader thinking things piece of macroand going any doesnt make any sense. And able to say i dont buy that. An the prisoner of war camp. Theres one piece of context alex didnt. I can with another toy recession. Which is the baby sitting coop recession. Which become famous. With baby sitting time and didnt have enough of the currency so nobody wants to go out and enjoy themselves and stay in and baby sit for somebody else until they had more currency. And because everybody wants to stay in and baby sit and nobody wants to go out. There was a depression and the depression was effectively permanent because the price stickiness was effectively permanent. Because no one would really negotiate on the value of this currency. Is that a fair model how a real economy works . No. I dont think it is. People sometimes criticize paul for using it as an example. I think thats the criticism is little fair. Hes trying to give you a sense of some of the mechanisms that might be at work while acknowledging a real economy is more complicated. You figure out how they fit together. Neither of these are hip theatrical. They are reality recessions that happened. The prisoner of war camp recession what is interesting is the prisoner of war camp economy worked extremely well. The french wanted coffee. The english wanted tea. What a surprise. So the economy worked well. There was no price stickiness. The senior British Office in the camp tried to fix prices. Its crazy. The prices keep moving. It cant be allowed. He fives you a sense what is going on. I talk about more convincing im sorry alex felt i say in the book that government stimulus fiscal stimulus is almost always inappropriate in response to a recession. Its almost always going to be unnecessary, its going to be too late. And i believe they also agreed with this. I said we are absolutely right to be suspicious of people who propose theyre going to waste money and its all its not a great idea. I say; however, that i happen to think in the most recent recession demand was an important part of the story. The recession was deep. There wasnt an appropriate role to stimulus spending. I think its the first time true for 40 years. Possibly the the true for 80 years. Thank you. Its a thoughtful comment. One more thing, all i would say as you describe with supply shocks. Sometimes and i totally agree saints more look at individual firms. I think thats a very good approach. I would say i feel both with the small supply shocks. I think we can open it up for questions. Please raise your hand. Wait for the microphone. And introduce yourselves. The gentleman in the third row. There seem to be not very good at predicting things. The reason model they are thinking in 18th century term of the economy as a machine even classical and scholastic economic. That has a more complete understanding of human nature and reflected in the economy. Economic modeling being done now . Im a pluralist, as i point out in the final chapter. I think that a lot of very interesting approaches that need to be reflected in us in understanding of the economy. Because ultimately the economy is a human system and they are hugely complicated. You get them together approaches from complexity theory and understanding banking safety engineering. Thinking about whistle blowers. The complex systems. Its a story about the great economist also have a lot of insight and knowledge at the time when Insider Trading was legal. And statistic because he was building them at the time. Forecasting is really hard. I dont think it should be the benchmark of whether we understand the system or not. Let me underline a few things which tim said which i agree with. First, i would like to say im a pluralist. One area which economists did go wrong is that the only thing you can get that i think was really terrible. On which way to go i think its less clear. Theres a lot of talk about behavioral economics and psychology versus the maybe it will turn out to be fruitful. I would say just complexity itself modeling as i was suggesting the Network Structure of the economy. The way that sectors and firms are connected. Even before adding adding in behavior complications i think will generate a considerable amount of complexity. Its not you dont necessarily need in order have a different looking economic. On forecast again i agree with tim. You have to bear in mind that who are forecasting and trying to forecast people whose forecast probably at least and the people are trying to forecast knowing that even if anybody was good at forecasting once you introduce the fact you try to forecast over people that try to forecast. Then its, you know, all bets are off. Youre not going get a system that is easily forecastable. Thats the essence of the expectations broach. Approach. Hi. My name is im a retired economist and attorney. You mentioned who was a friend of the u. S. A. Austrian and in the Cato Institute im wondering as part of your plural itch in the book do you discuss austrian Business Cycle theory. And if so in a sentence or two, what do you think about it. Call adapt which is about in economies and why theyre important and what stands in their way. Where i think he was particularly exciting and adapt its interesting. There are a lot of people who might call foul weather austrian. The Financial System being over expansion or expansion their. In the standard austrian view, its the you have a simple mechanism the government the Federal Reserve lowering Interest Rates. Thats the expansion their aspect. But through technology and innovation and financial innovations. Starts to put out a lot more credit, you know, on the basis of the same money supply you gate vast expansion in credit. And you get automatic of these House Building and so forth. That can later turn out to be infeasible. The public doesnt really want all the houses or, you know, you get the collapses and things like that. Larry summers talked about this. Paul talked about this