Comments on: Can Econometricians Tell Us which Macroeconomic Model is Best? http://wallstreetpit.com/9392-real-business-cycle-new-keynesian-monetarist-type-macroeconomic-models Tue, 22 May 2012 19:21:52 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Edward J. Dodson http://wallstreetpit.com/9392-real-business-cycle-new-keynesian-monetarist-type-macroeconomic-models#comment-52508 Edward J. Dodson Wed, 12 Aug 2009 15:34:24 +0000 http://wallstreetpit.com/?p=9392#comment-52508 One of the few economists who accurately forecasted the current financial meltdown and global economic crisis is Fred Harrison, in the UK. The reason is that Fred long ago abandoned the teachings of his neoclassical professors in favor of the economic model of earlier political economists. What Fred came to understand is that price does not clear the markets for nature (i.e., the markets for locations in cities and towns, for natural resource-laden lands, for the broadcast spectrum, for take-off and landing rights of way at airports, and what the political economists recognized as "natural monopolies" that yield unearned income flows (i.e., rents). I became acquainted with Fred's work in the early 1980s when I was analyzing property market dynamics while working for a large commercial bank. In 1984, I joined Fannie Mae as manager of a team of credit underwriters and then moved into positions as a market analyst and business manager. Fred's first book, The Power in the Land, made a huge impression on me but he explained why land markets -- particularly when fueled by cheap and easily-acquired credit -- are inherently dysfunctional, dominated by speculation, and prone to booms and busts. Around 2003, Fred asked me to provide him with research assistance on his (then) latest book project, predicting the next downturn in the property markets. The result was "Boom Bust: House Prices, Banking and the Depression of 2010" published in 2005. Since the publication of "Boom Bust" Fred has become very visible in the UK as a critic of government policy. He has established a website called "Renegade Economist" and is interviewed weekly to provide insight into what is happening in the global economy. Additionally, he has been traveling around the globe to produce hard-hitting documentaries on what has gone so wrong in country after country. In 2005 I decided to retire from Fannie Mae so that I could, in my own way, continue to monitor the performance of the U.S. economy and provide a warning of what is on the horizon. Based extensively on Fred's analysis, I have developed two Powerpoint presentations, one on the business cycle and a second on the financial meltdown (I title "Death by Debt Strangulation"). If anyone would like to review these presentations and provide your reactions, I am happy to send them via email. Just contact me at ejdodson@comcast.net. Fred Harrison and I believe things will get much worse before the speculative fever that brought us to this point is torn from the global economy. What is needed are fundamental changes in public policies, changes that are not on the table for discussion in any government of which I am aware. One of the few economists who accurately forecasted the current financial meltdown and global economic crisis is Fred Harrison, in the UK. The reason is that Fred long ago abandoned the teachings of his neoclassical professors in favor of the economic model of earlier political economists. What Fred came to understand is that price does not clear the markets for nature (i.e., the markets for locations in cities and towns, for natural resource-laden lands, for the broadcast spectrum, for take-off and landing rights of way at airports, and what the political economists recognized as “natural monopolies” that yield unearned income flows (i.e., rents).

I became acquainted with Fred’s work in the early 1980s when I was analyzing property market dynamics while working for a large commercial bank. In 1984, I joined Fannie Mae as manager of a team of credit underwriters and then moved into positions as a market analyst and business manager. Fred’s first book, The Power in the Land, made a huge impression on me but he explained why land markets — particularly when fueled by cheap and easily-acquired credit — are inherently dysfunctional, dominated by speculation, and prone to booms and busts. Around 2003, Fred asked me to provide him with research assistance on his (then) latest book project, predicting the next downturn in the property markets. The result was “Boom Bust: House Prices, Banking and the Depression of 2010″ published in 2005.

Since the publication of “Boom Bust” Fred has become very visible in the UK as a critic of government policy. He has established a website called “Renegade Economist” and is interviewed weekly to provide insight into what is happening in the global economy. Additionally, he has been traveling around the globe to produce hard-hitting documentaries on what has gone so wrong in country after country.

In 2005 I decided to retire from Fannie Mae so that I could, in my own way, continue to monitor the performance of the U.S. economy and provide a warning of what is on the horizon. Based extensively on Fred’s analysis, I have developed two Powerpoint presentations, one on the business cycle and a second on the financial meltdown (I title “Death by Debt Strangulation”). If anyone would like to review these presentations and provide your reactions, I am happy to send them via email. Just contact me at ejdodson@comcast.net.

Fred Harrison and I believe things will get much worse before the speculative fever that brought us to this point is torn from the global economy. What is needed are fundamental changes in public policies, changes that are not on the table for discussion in any government of which I am aware.

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