This paper addresses several key issues regarding the recent Great Crisis 2007- 2009. The main ones are: was the financial crisis predictable by standard economic models? If not, are these models lacking of forecasting capabilities, or it is not a task of economic models to predict external...

In this paper, we reformulate the theoretical baseline DAS-AD model of Asada, Chen, Chiarella and Flaschel (2004) to allow for its somewhat simplified empirical estimation. The model now exhibits a Taylor interest rate rule in the place of an LM curve and a dynamic IS curve and dynamic...

This paper addresses several key issues regarding the recent Great Crisis 2007-2009. The;main ones are: was the financial crisis predictable by standard economic models? If not, are these models lacking of forecasting capabilities, or it is not a task of economic models to predict external events...