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Nobel laureates warn about the possibility of new financial crisis
Material posted: Publication date: 26-08-2017
Members of the elite in the field of economic studies doubt the protection of the financial world crises. As regards the Euro and its future seems to them uncertain.

Smye smart minds in economic science warned about the possibility of a new crisis. According to them, despite the reforms of recent years, continue to exist uncontrolled region. It would be wrong to maintain confidence in the good situation on the stock exchanges and stable environment. These are the results of the newspaper Welt of a survey among 18 Nobel prize laureates in Economics, who this week discuss in Lindau on lake Constance the most acute economic problems. Shortly before the sixth meeting of Nobel laureates in Economics, which is considered a kind of economic summit, representatives of the Guild, its members explicitly distanced themselves from the head of the us Federal reserve Janet Yellen. At the end of June of this year Yellen in her caused more resonance speech said that in our lifetime more will not be any financial crises.

"I wouldn't bet on this statement — said in an interview with the newspaper Welt Khol'mstrem Bengt (Bengt Holmström) won the Nobel prize 2016. Every time we think that there will be no mass withdrawal of funds from accounts of banks, the risk of recurrence of the situation increases." Even more clearly expressed their opinions Edward Prescott (Edward Prescott), winner of the Nobel prize in 2004: "With the big share of probability it is possible to say that in the near future there will be a financial crisis."

Short-circuit in the system

Thus, the Nobel prize a decade after the previous financial crisis make a new edition of a similar crisis in the political agenda. This crisis, many have already been moved out of his consciousness — in a time of terrorism, possible nuclear confrontation and an all-new escapades of the American President, little attention is paid to the economic problems and the shortcomings of the financial system.

Many will depend on how to react to the policy, emphasized by the Nobel laureates. "If now the American administration in Washington would weaken the bit, the economic crisis will become more likely," says Eric Maskin (Eric Maskin), Nobel laureate 2007. These outstanding economists doubt that will ever effectively protect the financial world from future crises. During the existence of global digital networks is an illusion, says Daniel McFadden (Daniel McFadden), Nobel laureate 2000. "The financial risks move like electricity in a huge network." As in the case of current, in the financial system on a regular basis there is a short circuit. "We do not have the necessary tools in order to follow this kind of instability, regulate it and control it. Therefore, a new financial crisis is inevitable," stressed McFadden.

Message from Lindau

Once again confirmed the trend of this meeting, the essence of which is in the direction from shores of lake Constance to the outside world an increasing number of political messages. Three years ago, a keynote at this event, Federal Chancellor Angela Merkel, which contained a critical assessment, attracted everyone's attention. Then Angela Merkel chided economists is that they give policy detached from the life advice.

This year's speech at the opening of the conference will be delivered by President of the European Central Bank (ECB), Mario Draghi. This guardian of the European currency will be difficult on the eve of the scheduled for September a crucial meeting of the Board (of governors), the ECB is to convince economists of protection from the crisis of the common currency — the majority of respondents laureates believe that the Euro is still far from fully recovered after the financial and debt crisis. "The Euro could flourish only if the EU is to establish a fiscal policy in the Euro area on a sounder basis and will deal with the economic stagnation in those member countries in which labour productivity is at a relatively low level," said McFadden in an interview with the newspaper Welt. Goes even further and Eric Maskin (Maskin, Eric): "If the Euro wants to survive in the long term, it is necessary not only conducts a single monetary policy, but also a common fiscal policy".

Only one winner of the positive against the Euro

According to the economist-laureate Prescott, it looks like the fruitless efforts of love. "I am very pessimistic about the Euro," said this in-residence at the Arizona state University scientist. "The question is, in fact, is only, what kind of damage the Euro zone will cause it to his collapse". European Union member States must have sovereignty in financial matters. "Reasonable and understandable the benefits of a monetary Union is easier to implement," added Prescott.

Member countries of the European Union could tie its currency to the newly introduced German mark and accordingly adjust its course. "Some countries will never be able to comply with the budget rules. In the extreme case must exist and the possibility of bankruptcy of the state." Prescott has a weight in the political sphere. He does temporary factors in the economic policy, that is, how decision-making policies actually fulfill their promises.

However, one expert believes that the Euro has a good future. "The common currency might well develop primarily because America in the global competition of currency is highlighted by the poor management of the dollar," says Vernon Smith (Vernon Smith), Nobel laureate of 2002.

A world filled with robots

The growing digitalization of economic world is also one of the topics that will likely be discussed in Lindau. As leading experts in the world of information technology — in particular, the Creator of Microsoft bill gates warns against the growing world of robotics and requires, for example, the introduction of a tax on the robots, the majority of Nobel laureates in Economics clearly are less pessimistic.

"A world filled with robots that perform repetitive work, it's wonderful picture," said Prescott, who in relation to many other questions about the future configured rather pessimistic. And Nobel laureate McFadden also believes the growing digitalization, rather, proof of the success of the economy — a world filled with robots, he said, "generally causes no concern," and is rather a Testament to how well things are going in the field of innovative potential. "The economy, which is especially arranged freely, will achieve the best results," he said.

However, McFadden, who received the Nobel prize in 2000 for his research in the field of analysis of important human decisions, is more cautious. "Robots, artificial intelligence and digital networks have the ability to significantly improve human life. At the same time they have a destructive force because it is pushed to the margins of the business models, work forces, as well as political and economic institutions." Therefore, according to him, it is important to implement these innovations with additional measures to ensure that society as a whole benefited from the advantages of the technological revolution — not only individual and a few beneficiaries.

The biggest problem of mankind? "Ignorance"

For most Nobel prize winners of the ongoing technologization and its side effects are not the most urgent problem that needs to be solved at the moment. The greatest danger for the humanity they see in the ongoing climate change. "The provisions of the Paris protocols in respect of climate protection should be implemented, and this should be done regardless of the us withdrawal from the Paris agreement", — said the Finnish Nobel laureate Holmstrom.

Nobel laureates are also disturbed by the disappearance of the planet as a result of human activities some species of animals and plants. "The destruction of biodiversity is happening at an unprecedented rate," notes Robert Aumann (Robert Aumann), Nobel laureate 2005. In his opinion, the solution to this problem is no easy task. "First and foremost, the poor, the underdeveloped countries should receive incentives in order to stop the environmental destruction that happens to them in a particularly sharp form".

And a related problem of poverty. From the point of view of Vernon Smith, who received the Nobel prize in 2002 for the study of capital market, the solution to this problem is possible only in case of change of the current policy in the field of development assistance. "Currently the program transfers should be significantly reduced as they create a dependence," he said. Instead, you need to provide help for self-help. "The fight against poverty has been a failure," he says.

Christopher Sims (Christopher Sims), winner of the 2011 poses the biggest problem of humanity in an even more condensed form. To this question he replied with one word: "Ignorance."

Schapitz Holger (Holger Zschäpitz), Anja Ettel (Anja Ettel)


Tags: economy , crisis

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