An overconfident ECB is sure to drop the ball

One of the features of the recession/depression is that there has been more focus on the role of economists and economics. Seen from the inside, what is stark is how lopsided this has been and how it throws up questions on policy formation.

Much of the economic talk has, perhaps perforce, been dominated by discussions on macroeconomic and macrofinancial issues, with real estate economics coming close on their heels.

Economics is first and foremost about the relative cost and benefit of choices. Different actors make different sets of choices; firms about employment and production, workers about work and leisure, consumers about goods and services, and so on. People make decisions based on a combination of rational and other reasons.