Letter: The economics of normal behaviour

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The Independent Online
Sir: Diane Coyle's article ("Mainstream economics needs to get a firm grip on reality", 27 March) provided an answer to a mysterious lack of substance behind the explanations as to why the last recession did not recover but kept on going.

In 1991 the recession had been underway for a year or more and showed no signs of recovery, unlike other recent recessions. The explanation given for this was that people were not increasing their borrowing as they had done previously at the same stage of the cycle, a possible reason for this being that the very size of outstanding debts inhibited "normal" behaviour.

What puzzled me at the time was that, although the explanation seemed plausible, there appeared to be no follow up, no monitoring of (say) consumers' attitudes to debt, spending and job security. How else could the end of the recession be predicted?

By turning away from the importance of history and culture economists risk misunderstanding their subject. Diane Coyle is right to call for a more broadly based understanding of economics - the sooner the better.


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