@Matt. I’ll leave this here [pdf]. If 12 individuals separately publish predictions of a housing related financial crisis, including timing, before it occurs, and all 12 use an accounting-balance sheet macro  framework (2 pure Austrians the rest mostly Post-Keynesian), as opposed to a equilibrium framework used in more mainstream economics, and these 12 predictions are subsequently shown to be correct, does this:

a) count as understanding the financial crisis? Is Kahneman (or are you interpreting Kahneman as) referring to people who are ex-post rationalising without publishing anything prior, or to the people such as the 12 in the link. Should we conflate the two?

b) mean that “the state of macro is good” [link]. These individuals merely got lucky. The fact that their models share commonalities that the standard models lack is a coincidence! There is no need to replace or even question the role of equilibrium models. Even when these models are then used to justify policies that benefit bankers rather than ordinary folk. 🙂

Ross Gittins should read that article. And one of us should post that McCloskey piece 🙂

This is why I like the narrative version of economics, we are just trying to tell compelling stories, ex-post, about the elements we can measure and make some sense of.  I find that McCloskey description of good economics as history now – but I think if that is the case, it might be useful for the discipline to play around with some of the methods of historians for a little bit.