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Paul Romer on Fundamentalists versus Realists

Posted on October 09, 2008

He writes: Fundamentalists versus Realists Growth Commission Blog: In the current crisis, the astonishing and unexpected consequences of the Lehman Brothers bankruptcy should serve as a similarly decisive data point. On the Thursday and Friday before Lehman filed for protection, I was at a conference on the financial crisis. Everyone there expected them to file on Monday. We repeated for each other all the fundamentalist arguments: Everyone had been given time to prepare. The courts handle bankruptcies all the time. None of us expected that putting Lehman through a court managed bankrup...

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fed , the fed , treasuries