Stuck in a Paradigm

The Great Financial Crisis (GFC) came as a surprise for most economists, and henceforth was at the same time a crisis for economics. This thesis attempts to offer an explanation for this that goes beyond scapegoating. In order to do so, an interpretation of economics before and during the GFC is developed, based on the ideas of Thomas Kuhn. The paradigm of mainstream economics is analysed. The main ingredients of this paradigm – the DSGE model, the Efficient Market Hypothesis and the Great Moderation – did not prepare economist for the GFC. The GFC is an anomaly, something that does not fit in the existing paradigm. The fact that economists did not anticipate the GFC is a consequence of the paradigm within which they worked. To avoid a similar scenario in the future, economists have to think beyond the borders of the existing paradigm. This requires an adjustment of mainstream economics, or even a completely different paradigm.