'James Montier: What Goes Up Must Come Down!'A Little Detour into My Murky Past
Nearly a quarter of a century ago, I was a young, naïve, and foolish believer in an economic concept known as rational expectations – an elegant, mathematically beautiful theory with no practical use. In Star Wars parlance, had effectively been seduced by the dark side. Thankfully, several of my university lecturers were determined to save me from this terrible fate. They insisted on teaching me a very wide variety of approaches to economics including the Marxist perspective and the something known as post-Keynesian macro. I owe them a huge debt of gratitude. I thought at the time that these were at best esoteric distractions. Little did I know that they were going to provide some of the most profound insights into fi nancial markets, illuminating many of the fl aws that conventional thinking ignores. Early on in my career I was fortunate enough to interact with a number of colleagues who used some of these tools to uncover observations that the mainstream had completely missed. This made an indelible impression upon me, and these tools are still the ones I reach for when faced with trying to understand the world.