Bank official admits economists were to blame for recession

Andy Haldane, executive director for financial stability at the Bank, said economists misled policymakers in the years before the crisis by promoting a “blinkered” view of the world based on the assumption their theories were unfailingly correct.

The academic establishment, including central bankers, needs to own up to its mistakes, he added.

Mr Haldane’s comments could get him into trouble with Sir Mervyn King, Governor of the Bank, given Sir Mervyn’s reluctance to submit the Bank to an internal inquiry into its handling of the financial crisis.

In an interview with OurKingdom, the UK arm of openDemocracy, Mr Haldane said: “It’s right that it should shoulder some of the blame [for the financial crisis]. In part, this is because thinking within the wider academic economic community did start to shape and influence public policy in important ways.”

He added: “I think looking ahead, central banks – this isn’t remotely just about the Bank of England – are going to need ... to say when they’ve got it wrong, to admit to mistakes when they’ve been made.”

Read more: http://www.telegraph.co.uk/finance/economics/9442430/Bank-official-admits-economists-were-to-blame-for-recession.html