This is the text of a speech given by Martin Wolf, chief economics commentator, at the FT’s annual economists’ drinks party in London last night.  

Last year I enjoyed telling a number of entirely unfair jokes about economists. This year, I looked at the same source and found only one joke about the profession’s involvement in depressions. Here it is:

“Such a severe depression and banking crisis could not have been achieved by normal civil servants and politicians, it required economists’ involvement.”

This, in short, is a time for humility. Why did we mostly get “it” so sensationally wrong? How did something that looks increasingly like the precursor of a slump creep up on almost all of us this year? It is a pretty good question. It is a pretty embarrassing one, too. It is one everybody I meet now asks. Even Her Majesty has asked why we didn’t do a better job of forecasting this mess. Read more