By William K. Black
February 27, 2017 Bloomington, MN
How has the Swedish Central Bank’s committee that awards prizes in Economics in honor of Nobel responded to the field’s abject failures regarding the recent financial crisis and the Great Recession? A lesser group would display humility, acknowledge its failures, and promise a fundamental rethink of the field. Neoclassical economists, however, are made of sterner stuff. The committee’s response is to praise the discipline for its theoretical advances and proposed policies related to finance, regulation, and corporate governance. Eugene Fama, Jean Tirole, Oliver Hart, and Bengt Holmström exemplify this pattern. This series of articles discusses the joint award in 2016 to Hart and Holmström. In this introduction to the series, I outline the major errors that I will address in this series.