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Identifying economic crises: insights from history

Published online by Cambridge University Press:  19 May 2015

Xavier De Scheemaekere
Université Libre de Bruxelles
Kim Oosterlinck*
Université Libre de Bruxelles
Ariane Szafarz
Université Libre de Bruxelles
K. Oosterlinck, corresponding author: Université Libre de Bruxelles, SBS-EM, CEB,


Economists have been blamed for their inability to forecast and address crises. This article attributes this inability to intertwined factors: the lack of a coherent definition of crises, the reference-class problem, the lack of imagination regarding the nature of future crises and sample-selection biases. Specifically, economists tend to adapt their views on crises to recent episodes, and omit averted and potential crises. Threshold-based definitions of crises run the risk of being ad hoc. Using historical examples, this article highlights some epistemological shortcomings of the current approach.

The past mirror: notes, surveys, debates
Copyright © European Association for Banking and Financial History e.V. 2015 

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