Attempts to measure economic aggregates precisely have failed to forecast the boom and bust cycle accurately, but economists who focused on basic cause-and-effect relationships among economic phenomena were among the most prescient predictors of the 2000 stock-market bubble and crash. While some analysts noted correctly that price-to-earnings ratios were unduly inflated, it was economists of the Austrian school who offered an explanation for why stock-market valuations had become inflated and unsustainable.
|Other Independent Review articles by Mark Thornton|
|Spring 2014||Smuggler Nation|
|Spring 2013||American Nightmare|
|Summer 2010||Modernizing a Slave Economy|
|[View All (8)]|