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Unformatted text preview: Nick Woolf Honors Micro Economics September 23, 2009 Mrs. Harvey Where Economists Went Wrong The current state of the United States economy has led to a good deal of finger pointing among government officials. In times of crisis, it is human nature to identify source of the problem before fixing it, and thus more time has been spent blindly accusing than drafting ways to repair the mess. New York Times writer Paul Krugman, however, has found in his mind the perpetrator: economists. With the sole purpose of studying, evaluating, and monitoring the nations economy, how could the majority of economists have not seen this market failure coming? According to Krugman, the answer is simple: economists did not want to complicate things by preparing for the worst and, instead, worked inside their own problem-free bubble. In his article titled: How Did Economists Get It So Wrong, Krugman criticizes economists for blinding themselves with the notion that free market economies are, essentially, perfect, and that although minor problems may occur, the Federal government prevents any large-scale catastrophes from transpiring. Instead of preparing for possible problems, economists created theoretical models that failed to account for real-world fundamentals. Since the late eighteenth century, most economic theories (according to fundamentals....
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- Spring '09