Radical Uncertainty: Decision making for an unknowable future is a timely new book from eminent British economists Professor John Kay and former Bank of England Governor Lord Mervyn King. I recently interviewed Professor Kay about the book and our conversation is now available as the latest Economics Explained episode.
A transcript of the interview is available on my business website.
Use these (approximate) timestamps to jump right to the highlights:
- 2:34 – John Kay on what is meant by Radical Uncertainty, beginning with references to Maynard Keynes and Frank Knight
- 8:40 – discussion of what Kay and King see as the critical question, “What is going on here?”, in the context of coronavirus
- 14:35 – discussion of non-stationary process
- 16:25 – discussion of the usefulness of economic models, with me asking John to explain the statement in the book “You cannot derive a probability or a forecast or a policy recommendation from a model…”
- 26:10 – John explains the importance of robustness and resilience in systems in response to a question referencing climate change
It goes without saying that this book is highly recommended reading. I picked up a copy from Dymocks on Queen St Mall, Brisbane which I expect still has some copies available.
This episode was recorded on Friday 24 April 2020 using Zoom.