How Many Economists Does It Take to See a Crisis?

Suppose you went into the street and hit passersby with some breaking news: “Listen,” you say, “derivatives and other exotic financial products can sometimes make financial markets less stable and more prone to crises. What do you think about that?”

You would, I expect, see some perplexed faces. Those with any grasp of what you were talking about would say, “Are you kidding? We already know that. All that stuff is mostly used for gambling and speculation.”