How Did Economists Get It So Wrong?

Back in 2006 and 2007 as we were closing in on the worst financial disaster since the Great Depression, economists were united in self congratulation. They were certain their theories of economy had been so finely honed that nothing could possible go wrong. Markets were prefect in setting the value of investments so long as they were left completely free of regulation. Pure laissez-faire capitalism had put an end to the cycle of boom and bust, ensuring perpetual prosperity.

Check out Pall Krugman’s op-ed piece, where he asks “How did economists get it so wrong?” What do you think?