Justin Fox is editorial director of the Harvard Business Review Group and author of The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street.
Email Tweet This Post to Facebook Share on LinkedIn Print Featured Products 10 Must-Read Articles from HBR Buy it now » How to Get the Right Work Done Buy it now » HBR's Must-Reads on Managing Yourself Buy it now »If you're like me, you've seen and heard a lot of economist Nouriel Roubini lately. Just in the past couple of weeks, the NYU professor known as Dr. Doom has been interviewed on NPR's Morning Edition, in the FT, in Der Spiegel, on HBO's Real Time with Bill Maher. Not to mention CNBC, but then he's always on CNBC. (Wanna know where he'll be next? Check the Twitter.)
It's partly that Roubini has a new book out, but also just that markets are in crisis (or something approaching it) yet again and so reporters and TV hosts turn again to the man who predicted the last crisis. Or so the story usually goes. In fact, Roubini didn't exactly predict the crisis that began in mid-2007. As Damien Hoffman has documented, Roubini spent several years predicting a very different sort of crisis — one in which foreign central banks diversifying their holdings out of Treasuries sparked a run on the dollar — only to turn in late 2006 to warning of a U.S. housing bust and a global "hard landing."
He still didn't give a perfectly clear or (in retrospect) accurate vision of how exactly this would play out. Who could? The global economy is an awfully complicated thing. And once the troubles became apparent to all in the summer of 2007, Roubini adroitly adjusted his forecasts to rapidly changing circumstances, weaving a gloomy but realistic course between those who at every turn hinted that the worst was over and the growing ranks (especially in early 2009) who predicted an uninterrupted slide into economic and financial chaos.
This was, for an economist, an excellent performance — certainly far better than that of most of Roubini's peers. But I'm more than a little weirded out by the status of prophet that he has been accorded since. As is made clear by his new book, Crisis Economics: A Crash Course in the Future of Finance, co-written with the excellent economic historian/journalist Stephen Mihm, Roubini is, well, just an economist. He's an economist with a gloomy bent and an admirable willingness to pick and choose ideas from different schools of thought. But for anybody who has been following the financial crisis and the various explanations for it over the past few years, there's nothing new or surprising in the book. The overarching argument that financial crises are endemic to capitalism was already laid out in far more detail by Carmen Reinhart and Kenneth Rogoff in the bestselling This Time is Different, and the only part of the book filled with real Dr. Doom passion is where Roubini argues that — you guessed it — we're still due for a U.S. debt crisis and a run on the dollar.
Is he right about that? Someday, definitely. Roubini is smart and serious enough not to name a date. That means he won't fade into oblivion like stars of past crashes (remember Elaine Garzarelli?). But it also means he has no clear answers for those trying to chart their course through financial markets or the business world. He's a scenario-spinner, not a prophet. And now that his scenarios of the financial future are widely known and at least partially accepted, it's hard for him to say much of anything that can surprise us.
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var disqus_identifier = 'http://blogs.hbr.org/fox/2010/05/what-exactly-is-nouriel-roubini.html'; Comments What Exactly is Nouriel Roubini Good For? If you're like me, you've seen and heard a lot of economist Nouriel Roubini lately. Just in the past couple of weeks, the NYU professor known as Dr. Doom has been interviewed on NPR's Morning Edition, in the FT, in Der Spiegel, on HBO's Real Time with Bill Maher. Not to mention CNBC, but then he's always on CNBC. (Wanna know where he'll be next? Check the Twitter.) It's partly that Roubini has a new book out, but also just that markets are in crisis (or something approaching it) yet again and so reporters and TV hosts turn again to the man who predicted the last crisis. Or so the story usually goes. In fact, Roubini didn't exactly predict the crisis that began in mid-2007. As Damien Hoffman has documented, Roubini spent several years predicting a very different sort of crisis — one in which foreign central banks diversifying their holdings out of Treasuries sparked a run on the dollar — only to turn in late 2006 to warning of a U.S. housing bust and a global "hard landing." He still didn't give a perfectly clear or (in retrospect) accurate vision of how exactly this would play out. Who could? The global economy is an awfully complicated thing. And once the troubles became apparent to all in the summer of 2007, Roubini adroitly adjusted his forecasts to rapidly changing circumstances, weaving a gloomy but realistic course between those who at every turn hinted that the worst was over and the growing ranks (especially in early 2009) who predicted an uninterrupted slide into economic and financial chaos. This was, for an economist, an excellent performance — certainly far better than that of most of Roubini's peers. But I'm more than a little weirded out by the status of prophet that he has been accorded since. As is made clear by his new book, Crisis Economics: A Crash Course in the Future of Finance, co-written with the excellent economic historian/journalist Stephen Mihm, Roubini is, well, just an economist. He's an economist with a gloomy bent and an admirable willingness to pick and choose ideas from different schools of thought. But for anybody who has been following the financial crisis and the various explanations for it over the past few years, there's nothing new or surprising in the book. The overarching argument that financial crises are endemic to capitalism was already laid out in far more detail by Carmen Reinhart and Kenneth Rogoff in the bestselling This Time is Different, and the only part of the book filled with real Dr. Doom passion is where Roubini argues that — you guessed it — we're still due for a U.S. debt crisis and a run on the dollar. Is he right about that? Someday, definitely. Roubini is smart and serious enough not to name a date. That means he won't fade into oblivion like stars of past crashes (remember Elaine Garzarelli?). But it also means he has no clear answers for those trying to chart their course through financial markets or the business world. He's a scenario-spinner, not a prophet. And now that his scenarios of the financial future are widely known and at least partially accepted, it's hard for him to say much of anything that can surprise us. var disqus_url = 'http://blogs.hbr.org/fox/2010/05/what-exactly-is-nouriel-roubini.html'; var disqus_title = document.getElementById('disqus_post_title').innerHTML; var disqus_message = document.getElementById('disqus_post_message').innerHTML; Please enable JavaScript to view the comments powered by Disqus.Posting Guidelines We hope the conversations that take place on HarvardBusiness.org will be energetic, constructive, free-wheeling, and provocative. To make sure we all stay on-topic, all posts will be reviewed by our editors and may be edited for clarity, length, and relevance. We ask that you adhere to the following guidelines.
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var zflag_nid="675"; var zflag_cid="424/414/391"; var zflag_sid="5"; var zflag_width="300"; var zflag_height="250"; var zflag_sz="9"; Recently from Justin Fox What Exactly is Nouriel Roubini Good For? May 26 Honesty Doesn't Pay, but It Sure Has Its Uses May 19 Will God Destroy Our Money or Will We Do It First? May 7 The C.K. Prahalad Fortune at the Bottom of My Backpack Apr 29 Why Target Goldman? Because That's Where the Money Is Apr 27 Most Read Most Commented Keep Up With HBR Follow us on Twitter » Become a Fan on Facebook » HBR on YouTube » Get Email Alerts From HBR Harvard Business Review Daily Alert Management Tip of the Day The Daily Stat Weekly Hotlist See all newsletters » var zflag_nid="675"; var zflag_cid="423/414/391"; var zflag_sid="5"; var zflag_width="300"; varIf you're like me, you've seen and heard a lot of economist Nouriel Roubini lately. Just in the past couple of weeks, the NYU professor known as Dr. Doom has been interviewed on NPR's Morning Edition, in the FT, in Der Spiegel, on HBO's Real Time with Bill Maher. Not to mention CNBC, but then he's always on CNBC. (Wanna know where he'll be next? Check the Twitter.)
It's partly that Roubini has a new book out, but also just that markets are in crisis (or something approaching it) yet again and so reporters and TV hosts turn again to the man who predicted the last crisis. Or so the story usually goes. In fact, Roubini didn't exactly predict the crisis that began in mid-2007. As Damien Hoffman has documented, Roubini spent several years predicting a very different sort of crisis — one in which foreign central banks diversifying their holdings out of Treasuries sparked a run on the dollar — only to turn in late 2006 to warning of a U.S. housing bust and a global "hard landing."
He still didn't give a perfectly clear or (in retrospect) accurate vision of how exactly this would play out. Who could? The global economy is an awfully complicated thing. And once the troubles became apparent to all in the summer of 2007, Roubini adroitly adjusted his forecasts to rapidly changing circumstances, weaving a gloomy but realistic course between those who at every turn hinted that the worst was over and the growing ranks (especially in early 2009) who predicted an uninterrupted slide into economic and financial chaos.
This was, for an economist, an excellent performance — certainly far better than that of most of Roubini's peers. But I'm more than a little weirded out by the status of prophet that he has been accorded since. As is made clear by his new book, Crisis Economics: A Crash Course in the Future of Finance, co-written with the excellent economic historian/journalist Stephen Mihm, Roubini is, well, just an economist. He's an economist with a gloomy bent and an admirable willingness to pick and choose ideas from different schools of thought. But for anybody who has been following the financial crisis and the various explanations for it over the past few years, there's nothing new or surprising in the book. The overarching argument that financial crises are endemic to capitalism was already laid out in far more detail by Carmen Reinhart and Kenneth Rogoff in the bestselling This Time is Different, and the only part of the book filled with real Dr. Doom passion is where Roubini argues that — you guessed it — we're still due for a U.S. debt crisis and a run on the dollar.
Is he right about that? Someday, definitely. Roubini is smart and serious enough not to name a date. That means he won't fade into oblivion like stars of past crashes (remember Elaine Garzarelli?). But it also means he has no clear answers for those trying to chart their course through financial markets or the business world. He's a scenario-spinner, not a prophet. And now that his scenarios of the financial future are widely known and at least partially accepted, it's hard for him to say much of anything that can surprise us.
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Posting Guidelines We hope the conversations that take place on HarvardBusiness.org will be energetic, constructive, free-wheeling, and provocative. To make sure we all stay on-topic, all posts will be reviewed by our editors and may be edited for clarity, length, and relevance. We ask that you adhere to the following guidelines.
All postings become the property of Harvard Business School Publishing
The editors
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