Greenspan and most macro-economists did NOT see the huge financial crisis coming.
None who rely on equilibrium type Keynes or neo-Keynesian type macro models, nor monetarist equilibrium type models saw it coming.
A few did see it coming, those that looked at flows of funds.
Here’s a great paper about it, Munich Personal RePEc. By Dirk J Bezemer, Groningen University, June 2009. Best I’ve seen.
ABSTRACT (78 words)This paper presents evidence that accounting (or flow-of-fund) macroeconomic models helpedanticipate the credit crisis and economic recession. Equilibrium models ubiquitous in mainstreampolicy and research did not. This study identifies core differences, traces their intellectual pedigrees,and includes case studies of both types of models. It so provides constructive recommendations onrevising methods of financial stability assessment. Overall, the paper is a plea for research into thelink between accounting concepts and practices and macro economic outcomes.
Keywords: credit crisis, recession, prediction, macroeconomics, flow of funds, financialization,neoclassical economics, accounting research