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Is Paul Krugman off the mark?

By Tom Streithorst  

Reality has a way of destroying elegant theories. This recession has demonstrated the vapidity of most neoclassical economics. It is hard to predict the collapse of the world economy and the destruction of a quarter of its wealth if you start with the assumption that people are rational, utility maximising and omniscient. Back before the bust, even distinguished economists were so infatuated with the Efficient Market theory that they argued bubbles were impossible. If markets always get prices right,…

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