Someone needs to send this to Megan McArdle:

Imagine we see an enormous rise in the number of traffic accidents in a major city. Cars keep colliding at intersections as drivers all seem to make the same sorts of mistakes at once. Is the most likely explanation that drivers have irrationally stopped paying attention to the road, or would we suspect that something might be wrong with the traffic lights? Even with completely rational drivers, malfunctioning traffic signals will lead to lots of accidents and appear to be massive irrationality.

Read “The House That Uncle Sam Built” by Steven Horowitz and Peter Boettke for a good rundown of what actually caused the housing bubble.

(via austrian economists)

Tags: Housing, Housing Bubble, Peter Boettke, Steven Horowitz

This entry was posted on Thursday, December 3rd, 2009 at 3:33 pm and is filed under News & Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.