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Roundtable: The West’s Decade of Despair

The collapse of Lehman Brothers in September of 2008 ushered in a new era of unprecedented policy interventions, political upheavals, and deep social and economic disruptions. And yet, for all that has changed in the intervening years, it would seem that much remains the same – or has become worse.

NEW YORK – It has been ten years since the global financial crisis devastated economies worldwide and ushered in an era of unprecedented monetary policies, national debt crises, and untold suffering and loss for billions of people. In this roundtable discussion, we examine the causes, consequences, and lessons learned (or not learned) from the 2008 crash and the Great Recession that followed it.

Each participant is an economist who has led the way in seeking sustainable and just solutions to the defining economic problems of our time. Robert (Bob) J. Shiller, a 2013 Nobel laureate in economics, is Professor of Economics at Yale University. Stephen S. Roach, also at Yale, is a former chairman of Morgan Stanley Asia. Teresa Ghilarducci is a labor and retirement security economist at the New School in New York. Jeffrey D. Sachs is the director of Columbia University’s Center for Sustainable Development and the United Nations Sustainable Development Solutions Network. And Angus Deaton, the 2015 Nobel laureate in economics, is a professor at Princeton University.

The Bankruptcy Heard Round the World

Project Syndicate: Let’s set the scene. It’s 2008. The housing bubble has burst. Asset prices are in free fall, and credit markets have seized up. People are losing their jobs, their homes, and their livelihoods. Why were those raising the alarm about the subprime mortgage boom for the most part ignored, and what crucial checks against excessive risk-taking had been weakened or eliminated in the years before 2008?

Bob Shiller: I was warning about a crisis. I don’t know if I used the term “Great Recession,” but I was worried that home prices were very high. I had created a data series of home prices going back to 1890, and what it showed really jumped out at me. Prices had never gone up that rapidly before, and it puzzled me that nobody had thought to look at that data.