Wall Street Shorts Economists
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In 1986, when the space shuttle Challenger exploded 73 seconds after takeoff, investors immediately dumped the stock of manufacturer Morton Thiokol Inc., which made the O-rings that were eventually blamed for the disaster. With extraordinary wisdom, the global market had quickly rendered a verdict on what happened and why.
Economists often remind us that markets, by pooling information from diverse sources, do a wonderful job of valuing companies, ideas and inventions. So what does the market think about economic theory itself? The answer ought to be rather disconcerting.