We economists like to explain things using highly stylized models. We build make-believe worlds, populate them with creatures that act according to strictly prescribed rules, and analyze what happens. Or, as my wife said after I described one of my research papers to her: “You really never did stop playing Dungeons and Dragons, did you?”
Such a foolish claim really only depicts what passes for economic analysis of Mainstream (neoclassical) economists. As such, it is not surprising that the bibliographic data for this article does not list a single reference to work by Austrian economists, many of whom anticipated the most recent bubble.
Also unsurprisingly, Williams, President & CEO of the San Francisco Federal Reserve Bank, turns to “pop psychology” that puts the blame on “human nature” rather than the misbehavior of central bankers.
Contrast Williams’ comment with the great pains that Austrian economists take to depict economic activities in their full complexity & dynamic nature.