Crisis

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Chapter 2 of Science and the Economic Crisis 

Why most economists did not foresee the economic crisis? Do liberalized and deregulated markets tend to equilibrium? What is markets equilibrium? After having reviewed the discussion about the value of predictions in economics we focus on the neoclassical theory. This describes the economic system as a mechanical one that spontaneously finds an equilibrium state. The underlying concepts are those of the nineteenth century physics: the balance between opposing forces and the thermodynamical equilibrium. These ideas are reconsidered through the perspective of modern physics, in which the systems composed of many parts interacting with each other hardly finds a situation of simple stable equilibrium. Rather they develop surprising collective, complex and emerging global behaviours that are not simply deduced from the knowledge of the microscopic dynamics.   However, since the outbreak of the crisis the leading economic ideas have not changed and continue to be inspired by the same economic theory that has spectacularly failed in its prediction of the crisis and that has created the conditions for its systemic occurrence. The origin of this resistance to a change is played by research assessment: only economists considered “excellent” in the academy play a public and political role. However, is it really that easy to determine who is excellent in a field that avoids the confrontation with reality?  #ScienceEconomicCrisis 

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