A model imposed from above proved unprepared for the crisis

Evidence

But perhaps it better illustrates the fact that the DSGE model was an attempt to be all things to all sides, a détente imposed from above, emitted from a very few “top-ranked” economics departments rather than a voluntary truce taking hold organically. This had something to do with its clueless setup for its vertiginous fall. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 785

Categorization

• XREF: connects to: LTCM’s crisis did not stem from blind faith in mathematical models. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1017; Belief in the Great Moderation blinded the Fed to signs of crisis — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 504; Neoclassical models cannot diagnose man-made crises, only exogenous shocks. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 763 (+3 more)

Broader Connections

• Orthodox economics models structurally excluded the possibility of major crises #expands (0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 491
• Efficient market theory could not imagine internally-generated systemic crisis #exemplifies (0.85) — Mark Blyth, Austerity, 130
• Untested risk models can detain people on factors having no real predictive value #exemplifies (0.70) — Brian Christian, The Alignment Problem, 269