Who Predicted the Bubble? Who Predicted the Crash?

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.