> a branch of mathematics called game theory, which is often used by economists, to work out how events will unfold as people and organisations act in what they perceive to be their best interests.
If it were really used by economists in power (e.g., in central banks or government), they would have foreseen the end of Bretton Woods, the early 80s recession, the 2000 and 2008 economic crisis, the currency race to the bottom, the strictly monotonically increasing gov't debt, the current housing price increases, ...
They might have also figured out that taxes to prevent smoking are likely to have the same effect if you apply them to employment and other productive applications.
Yet, here we are. The only question that remains is: Stupidity or malevolence?
> The only question that remains is: Stupidity or malevolence?
Stupidity. On your end. Let me address your claims one by one.
> the end of Bretton Woods
Ending Bretton Woods was voluntary. The gold standard leads to volatile inflation; look at the graph in [1]. Volatile inflation is bad because it makes transactions that take time to repay uncertain, see this video [2] for a layman explanation
> the early 80s recession, the 2000 and 2008 economic crisis
If economists at a central bank can foresee a crisis, the crisis doesn't happen. Full stop. What you are left, is, by definition, the ones people who work in regulation didn't see coming. Also note that those crises weren't foreseen by almost anyone, because of the nature of markets.
If you want to prevent crises, you need to put regulation up front that discourages the kind of short-sighted and reckless managerial and shareholder behavior that leads to those.
Hinging the stability of the economic system on the ability to catch an upcoming crisis in the making is doomed to fail, because you need a 100% accuracy (like making a system unhackable -- negative goals are much harder than positive goals).
> the currency race to the bottom
Do you mean low positive inflation, or are you buying into Donal Trump's talking points? Because if it's the former, it's intended, if it's the latter, I'm sorry to say you'll need sources to convince anyone that that's indeed something that exists.
All in all, what your post translates to is "I don't understand any of these things but I'm angry", which is not the right way to advise policy.
"You can't fire me, because I quit" - It's as voluntary as that, i.e., not. There were good reasons to have something close to a Gold standard in place but it just could not be maintained as the quantity of money in circulation increased continuously.
> If economists at a central bank can foresee a crisis, the crisis doesn't happen.
That does not address the fact that they didn't foresee it.
> If you want to prevent crises, you need to put regulation up
Or you just don't finance crises by having a naturally determined interest rate (instead of one determined by the central bank).
> the currency race to the bottom
I mean the fact that every major central bank inflates its balance sheet in order to decrease the value of its currency and "stay competitive".
Decisionmakers don't live outside the system, but within the system. So apply the game-theoretic framework to them, and you'll see why stupid or suboptimal decisions are often the outcome...
If it were really used by economists in power (e.g., in central banks or government), they would have foreseen the end of Bretton Woods, the early 80s recession, the 2000 and 2008 economic crisis, the currency race to the bottom, the strictly monotonically increasing gov't debt, the current housing price increases, ...
They might have also figured out that taxes to prevent smoking are likely to have the same effect if you apply them to employment and other productive applications.
Yet, here we are. The only question that remains is: Stupidity or malevolence?