Economic policymakers must rely on theory to guide them. If the theory is bad, policy can be disastrous. This is the situation today. The current consensus model of the economy (“CM”) leads to periodic financial crises. We risk having another soon. We must replace CM with a better model, and I propose we use The Stock Market Model (“SMM”) which is explained in detail in The Economics of The Stock Market published this year by Oxford University Press. If we use SMM we will have a much better theory, a much improved understanding of the economy and we will be able to avoid financial crises.
Andrew Smithers founded Smithers & Co in 1989. Before that he ran S G Warburg's successful asset management business for many years (now part of BlackRock). A regular financial commentator and columnist, and author of many academic publications, he co-authored Valuing Wall Street with Stephen Wright (March 2000). He wrote Wall Street Revalued: Imperfect Markets and Inept Central Bankers (July 2009), and “Can We Identify Bubbles and Stabilize the System?” in The Future of Finance, published by the LSE in September, 2010.
Other books include The Road to Recovery: How and Why Economic Policy Must Change (September 2013), and Productivity and the Bonus Culture (July 2019).
His latest book, The Economics of the Stock Market was published by Oxford University Press in March 2022.
Andrew seeks urgent change to accepted economic theory and the regular financial crises which policy based on it causes.
Monday, 10 October 2022
11:00 - 11:45 BST
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