Michael D. Goldberg

TL;DR: Economists not only failed to anticipate the financial crisis; they may have contributed to it with risk and derivatives models that, through spurious precision and untested theoretical assumptions, encouraged policy makers and market participants to see more stability and risk sharing than was actually present.

TL;DR: The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis, and to have significantly underestimated its dimensions once it started to unfold as mentioned in this paper.

TL;DR: Frydman and Goldberg as mentioned in this paper argue that both the rational and behavioral theories of the market rest on the same fatal assumption that markets act mechanically and economic change is fully predictable, and that the failure to abandon this assumption hinders our understanding of how markets work, why price swings help allocate capital to worthy companies, and what role government can and can't play.

TL;DR: In this paper, the authors explore the consequences of imperfect knowledge for exchange rate dynamics within the monetary class of models and find that, as long as agents possess at least some degree of imperfectknowledge, the monetary models of the exchange rate generate dynamics consistent with the behavior observed in the literature.