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Posted: 2018-05-29 02:46:28

"I don't think that's over," Reinhart said in an interview Sunday. "The next set of problems, the next set of crises I think have a much bigger fiscal core than the financial core of the 2008-2009."

'It's political'

Rogoff, who co-authored "This Time Is Different: Eight Centuries of Financial Folly" with Reinhart, flagged political turmoil as a risk.

"When we are talking about debt or fiscal policy, it's political," he said in a presentation. When economists write a model, they may have to say "you didn't tell me you would have Beppe Grillo become leader. You didn't tell me Donald Trump would be leader. You didn't tell me Jeremy Corbyn might win in England. You know, that wasn't in my model, but it's in the world."

"I think it's important to resist this time it's different, end of history thinking," Rogoff said, while also citing cyber warfare as potential source for future disruption.

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Rajan, now at the University of Chicago Booth School of Business, said the seeds of the next crisis may be hidden in emerging new technology.

What's missing?

"Of course you don't want to mess with fintech until you understand it better," he said. "But you don't want it to grow too big before, like sub-prime, you wake up and say what have we got here? You want to understand it better before that."

While it's hard to pinpoint where there will be a crisis, good places to look are where there's high leverage and high asset price growth, he said, "On fintech the issue is not so much that we know there's a crisis, but it's totally untested," he said.

Kristin Forbes, a former Bank of England policy maker who's now at the Massachusetts Institute of Technology, said the good news about the preceding decade is that economists now have a much better understanding of what triggers a crisis but that crucial work still remains on preventing the next one.

"What are we missing?," Forbes said in an interview Sunday. "One is we have a better understanding of the crisis, so that's good, but most papers stop there and there's not much work on what we do about it."

Her colleague at MIT, 2016 Nobel laureate Bengt Holmstrom, cautioned against relying on the predictive powers of economists all together.

"Economists on the whole are not good at forecasting anything because that is not really what our main business is," he said.

"Forecasting is a sexy business. Somebody is always right. But I don't think there is any consistency to being right."

Bloomberg

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