"No One Saw This Coming": Understanding Financial Crisis Through Accounting Models (Bezemer)

Summary

Dirk Bezemer (University of Groningen) assembled the documented public record of who anticipated the 2008 credit crisis in advance, with reasoning. On a direct read of the MPRA text, four selection criteria were applied: the analyst had to (1) give "some account on how they arrived at their conclusions"; (2) go beyond predicting a real-estate crisis to also "making the link to real-sector recessionary implications, including an analytical account of those links"; (3) have made the prediction personally and in the public domain, "rather than being asserted by others"; and (4) attach "some timing" to it.[1] Applying these led to exactly twelve analysts (Table 1), who shared a common feature: accounting / flow-of-funds models tracking credit and asset markets, against the equilibrium models that dominated policy.[1] MPRA Paper 15892 (June 2009); the analysis also circulated as a University of Groningen working paper and in a VoxEU column.[1][2]

The twelve are Dean Baker, Wynne Godley, Fred Harrison, Michael Hudson, Eric Janszen, Steve Keen, Jakob Brøchner Madsen & Jens Kjaer Sørensen (a professor–graduate-student pair), Kurt Richebächer, Nouriel Roubini, Peter Schiff, and Robert Shiller.[1] Correction on direct read: of the two Georgist predictors the wiki tracks, only Harrison appears in Bezemer's list; Fred Foldvary is not among Bezemer's twelve and is nowhere named in the paper. Foldvary's own 2008 forecast record stands on its own sources (see his page) and should not be attributed to Bezemer's audit.

This page de-references the citation carried by the cycle narrative and the 18.6-year-cycle research page: Bezemer is the independent, non-Georgist auditor of the prediction record — which is exactly why the wiki cites him rather than the predictors' own retrospectives. Harrison's Table 1 entry quotes his 2005 call that "the next property market tipping point is due at end of 2007 or early 2008 … The only way prices can be brought back to affordable levels is a slump or recession."[1]

See Also

• Narrative: Land Speculation Causes Boom and Bust
• Progress & Poverty's 18.6-year cycle record
• Harrison, Boom Bust — one of the audited predictions

Sources

1. Dirk J. Bezemer, "'No One Saw This Coming': Understanding Financial Crisis Through Accounting Models," MPRA Paper 15892, June 2009. MPRA (full-text PDF) · IDEAS — used for thesis, method, venue, the verbatim four selection criteria, the twelve-analyst Table 1 roster (and the verified fact that Foldvary is not among them), and the Harrison quotation; full text read directly in this pass.
2. Dirk J. Bezemer, "'No one saw this coming' – or did they?" VoxEU/CEPR column. CEPR — used as the author's own summary of the paper (A-claim).