Why economists have trouble with bubbles?

This is because bubbles and their bursting exposes all the hyped expectations and notions set by economists. Actually bubble is not really a proper word. It is just a reversal of economic cycle and is a pretty normal phenomenon. Just that econs think that their ideas and policies can conquer these cycles only to be humbled.

Noah Smith has a piece on the bubble trouble. He says much of the negation of bubble idea came from rational expectations revolution which has been humbled in the 2008 crisis.

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