This is true. The author doesn't mention behavioural economics but I think that that is more the way forward. People are not the simple rational actors of conventional economic theory. They lie, speculate, panic and so on. Bitconnect is a one word disproof of rational agent theory.
I don't know about predicting the mortgage crisis but if you assume humans are human in all sorts of awful ways then you should stick to systems which are simple robust and hard to screw up and time tested rather then the opaque mystery content derivatives that fueled the mortgage bubble. This may have prevented it rather than predicted it.
The prediction thing is tricky as in the joke "The stock market has forecast nine of the last five recessions." There are always people predicting things will go wrong but how do you filter which to take notice of?
Segments of economics have problem deciding whether to be descriptive or prescriptive; a theorist will come up with a proof of what a rational actor would do in a given situation. When it's pointed out that no one does that, the theorist responds that he is uninterested in the economics of stupid people.
Check out Misbehaving by Richard Thaler for the entertaining details.
I don't know about predicting the mortgage crisis but if you assume humans are human in all sorts of awful ways then you should stick to systems which are simple robust and hard to screw up and time tested rather then the opaque mystery content derivatives that fueled the mortgage bubble. This may have prevented it rather than predicted it.
The prediction thing is tricky as in the joke "The stock market has forecast nine of the last five recessions." There are always people predicting things will go wrong but how do you filter which to take notice of?