The Importance of Evidence-Based Economics

I think we would both like to know whether what caused housing prices to go up so fast and then back down. And if those prices were wrong in some sense, then it would be good to know. If I were the chair of the Fed or in charge of Fettie and Franny, if I saw places like Vegas and Scottsdale were in the 1990s, I would be raising lending requirements. But very gently, it's not that I think that policymakers know what's going to happen but if they see what looks disturbing, they can lean against the window a little bit. We're in total disagreement about whether policymakers ever get it right though.