Bruegel deputy director Maria Demertzis welcomes Financial Times commentator Martin Sandbu to explore the journey taken by the field of economics since the financial crisis struck 10 years ago, and discusses what new tools economics has now that it didn’t have then.

In this Director’s Cut of ‘The Sound of Economics’, we trace the journey upon which the field of economics has embarked since the financial crisis, what lessons it has learnt and what it can do differently now with the benefit of hindsight.

Economists and financial specialists failed to identify the burgeoning threat of financial imbalances, excessive risk-taking and housing bubbles that led to the crisis that first broke a decade ago. Can economics provide answers to the right questions – and in good time?

Bruegel deputy director Maria Demertzis is joined by Martin Sandbu of the Financial Times to look at what new tools and approaches can help economists make a difference in the event that any similar such crisis strikes again.

For further consideration we recommend another edition of the Director’s Cut podcast series, featuring a discussion between Maria Demertzis, Nicola Viegi – South African Reserve Bank professor of monetary economics at the University of Pretoria – and Frank Smets – director general of economics at the European Central Bank – on the topic of macroeconomics’ post-crisis reinvention and the flourishing of new models.

FURTHER READING

Rebuilding macroeconomics: Initial reflections on a major theory project

The DSGE Model Quarrel (Again)

Tales from a crisis: diverging narratives of the euro area

S5 Ep8: Director’s Cut: Is economics asking the right questions?

The Sound of Economics