What Lessons Can We Learn from the Boom and Turmoil?

The theme of this conference — “Lessons Learned from the Subprime Crisis” — appears to be a timely one, but there have been several times during the past year when I thought it was a good time to initiate projects to identify “lessons learned,” only to discover that the “crisis” was not yet over.1 I sincerely hope that this conference does turn out to be timely, in the sense that we truly are past the peak of the current turmoil. This episode undoubtedly will inspire a great deal of research in the years ahead, and it may take some time before anything like a professional consensus emerges on causes and consequences. After all, it took several decades to document the causes of the Great Depression, and recent research continues to provide new perspectives.2 Nonetheless, I believe the central questions that are likely to occupy researchers are plainly in view, and some tentative lessons have emerged already. And in any event, legislators are not likely to await the fruits of future scholarship.