"Why Economists Failed to Predict the Financial Crisis"

According to a recent article in Knowledge@Wharton, economists failed to predict the current economic crisis because they traditionally focus on the role of producers and consumers of goods and services in economic cycles, and fail to acknowledge the importance of financial institutions, at the root of the current global economic crisis. A limited understanding of human psychology and a reliance on mathematical models that don't accurately reflect reality are also blamed.

The article cites the recent "Dahlem Report", critical of economists' disconnect from the real world. A need to re-assess business school curricula is also cited.