The eighty years of peace and the great moderation is over, and the battleaxes are out - Paul Krugman reports that hostilities are breaking out among the Freshwater and Saltwater economists. Good overview of evolution of economic thinking over the past century, and how finance and economics play off of each other. Some choice quotes:
"...because a two-quart bottle of ketchup costs twice as much as a one-quart bottle, finance theorists declare that the price of ketchup must be right."
“the market can stay irrational longer than you can stay solvent.”
"Larry Summers once began a paper on finance by declaring: “THERE ARE IDIOTS. Look around.”"
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