Silverbird
Market Veteran
- Reaction score
- 27
......The closest alternative to a crystal ball, in the real world, is a computer model of the economy. Back in the 1980s, one such model was created by none other than Ben Bernanke, who's now at the center of the crisis as the chairman of the Federal Reserve.
Bernanke's computer model is called the "financial accelerator." It's now in the office of Mark Gertler, an economics professor at New York University, who worked on it with Bernanke decades ago......
....Does the model say the economy is heading for doomsday, unless there's an intervention? Gertler pauses, then says, "Uh, roughly speaking, yes."
Gertler says he hasn't asked the model to predict what comes next. But a colleague of his has been training the model on data from the past 20 years.
Simon Gilchrest, of Boston University, says the exercise has shown some clear results. "What the model is saying currently is we are experiencing a 2 percent decline in GDP growth because of these credit-tightening effects," he says.
....In coming days, Gilchrest expects to use the Bernanke and Gertler model to look into the future. He wants to ask whether the $700 billion the Bush administration seeks for a bailout would be enough."
http://www.npr.org/templates/story/story.php?storyId=95076198
[wish he had plugged that $700B into the model]
Bernanke's computer model is called the "financial accelerator." It's now in the office of Mark Gertler, an economics professor at New York University, who worked on it with Bernanke decades ago......
....Does the model say the economy is heading for doomsday, unless there's an intervention? Gertler pauses, then says, "Uh, roughly speaking, yes."
Gertler says he hasn't asked the model to predict what comes next. But a colleague of his has been training the model on data from the past 20 years.
Simon Gilchrest, of Boston University, says the exercise has shown some clear results. "What the model is saying currently is we are experiencing a 2 percent decline in GDP growth because of these credit-tightening effects," he says.
....In coming days, Gilchrest expects to use the Bernanke and Gertler model to look into the future. He wants to ask whether the $700 billion the Bush administration seeks for a bailout would be enough."
http://www.npr.org/templates/story/story.php?storyId=95076198
[wish he had plugged that $700B into the model]
