Central bank role crucial in preventing financial bubbles and crashes.
The article discusses a new economic theory that focuses on how people's expectations, job opportunities, and prices affect the economy. The researchers suggest that factors like job search, decision-making, and unpredictable human behavior play a crucial role in shaping economic outcomes. They also conducted experiments to test their ideas and found that traditional methods of managing demand may not always work well. Instead, they propose giving more power to central banks to prevent financial crises.